The Latest on Tariffs and ASI’s Exclusive Research Data
The ASI Media team shares the latest findings from ASI Research regarding tariffs and pricing, and gives their outlook for Q2 and beyond.
ASI Research has historically surveyed its members every three months as part of its Quarterly Sales Survey. But this spring, due to all the marketplace volatility from tariffs, the team has been surveying members monthly. The last time it did that? March 2020.
“It’s COVID all over again,” says Nate Kucsma, ASI’s senior executive director of research.
“The rapidly changing trade situation worldwide is really affecting our industry,” he adds. “We felt it was important to do what you could say are almost like temperature checks with our industry, so that we could find out what was going on.”
Following the release of last month’s report that revealed the promo industry declined by 3.6% in Q1, ASI Research is readying another report next week that looks at both distributor and supplier performance in April as well as tariff concerns, full-year expectations and price increases.
In this episode of Promo Insiders, Kucsma, along with ASI Media editors C.J. Mittica and Chris Ruvo, use the numbers for a wide-ranging discussion about the impact of tariffs on the promo industry right now. They highlight why sales were down in Q1, the latest news on tariffs, the ramifications of dwindling imports and the outlook for Q2 and beyond.
This episode is brought to you by S&S Activewear (asi/84358).
Key Takeaways
• Stepped-Up Efforts: While ASI Research typically surveys distributor members quarterly as part of its Quarterly Sales Survey, the volatility in the industry has led the team to survey members monthly and gauge the performance of both suppliers and distributors.
• A Slow Quarter: The promo industry declined by 3.6% in Q1, caused by the impact of tariffs and a general economic slowdown. Despite the decline, 40% of distributors still reported a sales increase in Q1, indicating that business was still happening, albeit more cautiously.
• Recent Developments: The pace of new tariff announcements has slowed, and while the U.S. and Chinese governments are scheduled to have trade talks this week, a quick resolution is unlikely. The talks may set the groundwork for future negotiations.
• Supplier Strategies: Many suppliers have paused imports from China due to prohibitive costs, leading to potential inventory shortages and increased prices. Geographic sourcing diversification is being pursued, but it is a slow process.
• Price Increases: Suppliers are raising prices to cope with tariff costs. Six in 10 suppliers have raised prices, with the most common increase being from 1%-10%. This trend is expected to continue as suppliers exhaust existing inventory and face higher replacement costs.
• The Outlook: Distributors and suppliers are relatively optimistic about increasing sales because they expect the tariffs to be reduced.