In recent years, the U.S.-China trade war has rippled across various industries, and one sector feeling the effects particularly hard is the promotional products industry. As tariffs on Chinese imports continue to climb, the cost of promotional products—from branded pens and apparel to custom trade show giveaways—has spiked dramatically, putting immense pressure on companies that rely on affordable imports for their inventory. This uptick in costs is having far-reaching consequences, not only for businesses in the promotional products sector but also for the broader events and conferences industry, where promotional items play a pivotal role in marketing and customer engagement.
The promotional products industry, a multibillion-dollar sector in the U.S., is deeply intertwined with China, which has long been the primary supplier of inexpensive, high-volume products. As tariffs have surged, so too have the prices of these items, putting a strain on small and medium-sized enterprises (SMEs), particularly those operating on tight margins. For some, the financial burden is proving to be too much to bear, forcing them to reevaluate their business strategies or even close their doors. For others, the escalating costs are shifting the way promotional products are sourced and delivered, creating ripple effects that are felt throughout the events and meetings industries.
The Impact of Tariffs on Promotional Products: A Costly Shift
When the U.S.-China trade war first began escalating in 2018, it triggered a series of tariffs on Chinese-made goods, with rates increasing as high as 25% on some categories. This has had a significant impact on promotional products, which often consist of items such as custom apparel, office supplies, tech gadgets, and gifts—all of which are typically sourced from China due to its manufacturing scale and cost-effective production capabilities.
The result has been an increase in product costs, forcing businesses to either absorb the higher prices or pass them on to customers. Small businesses in particular, which rely on tight margins and high volume, are finding it difficult to remain competitive. According to one company owner, who wished to remain anonymous, the rising tariffs have been particularly destructive: “The tariffs are driving small businesses like mine into the ground. We can’t compete with the price hikes, and we’re being forced to either raise our prices, lose clients, or just close up shop.”
A Growing Strain on Small Businesses
For small businesses in the promotional products sector, the stakes are even higher. As inventory costs climb, these businesses face difficult decisions. Some are forced to look for alternative suppliers in countries outside of China, such as Vietnam, India, or Mexico, but these alternatives come with their own set of challenges, including longer lead times and limited production capabilities. Moreover, shifting suppliers isn’t always a feasible option, especially for businesses that have built long-standing relationships with Chinese manufacturers.
One small business owner, operating a promotional products company for over 15 years, explains the dilemma: “The tariffs aren’t just a financial hit; they’re an existential crisis. We’ve built our supply chain around China’s competitive pricing, and now we’re scrambling to find alternatives that don’t cost us an arm and a leg. Some of our long-term clients are already feeling the pinch, and we risk losing their business if we can’t offer the same pricing they’re used to.”
This rising pressure has led many small businesses to rethink their pricing strategies, often forcing them to either significantly increase prices or accept lower margins—neither of which are viable long-term solutions. For many, the added costs associated with tariffs are simply too great to overcome.
Ripple Effects on the Meetings and Conferences Industry
Beyond the immediate financial challenges faced by businesses, these tariff-driven price increases are also reverberating throughout the broader meetings and conferences industry, where promotional products play a critical role in attendee engagement, brand awareness, and event marketing.
Promotional Products as Key Event Assets
Promotional products, including branded giveaways, corporate swag, and trade show materials, are an integral part of conferences and events. These items serve not only as tangible reminders of the event but also as a way to build brand recognition, facilitate networking, and create memorable experiences. From tote bags and t-shirts to custom notebooks and water bottles, event planners use these products to enhance the attendee experience, boost sponsor visibility, and increase brand loyalty.
However, as prices climb due to tariffs, companies organizing events—whether they’re trade shows, corporate conferences, or marketing activations—are being forced to scale back on the quantity or quality of promotional items they distribute. This is a particularly difficult challenge given that attendee expectations for high-quality giveaways and experiences are at an all-time high.
Rising Costs Lead to Event Modifications
Some event organizers are already adjusting their strategies to navigate the price hikes. Larger events are scaling back on the number of promotional products handed out, while smaller events are opting for more cost-effective alternatives, such as digital swag bags or event apps that offer discounts and virtual giveaways instead of physical items.
Event organizers are also adjusting their budgets, often reallocating funds from promotional products to other areas, such as venue rentals, technology, or experiential activations. While this helps balance budgets, it also means that attendees are receiving fewer physical takeaways, which can impact the overall event experience and brand engagement.
As sponsorship opportunities at events are often tied to promotional product distribution, these budget cuts are also changing the landscape for sponsors, who may be less willing to invest in large quantities of products if the return on investment isn’t as clear. This is especially problematic for brands that have historically relied on in-person giveaways as a primary method of customer engagement.
Innovation in the Face of Price Hikes
In response to the mounting pressure, some companies are turning to alternative promotional products that are more affordable or come from different supply chains. There’s been a noticeable shift toward locally sourced and eco-friendly products, which may come with higher upfront costs but offer long-term benefits in terms of sustainability and brand image.
Event organizers are also experimenting with customization options that use digital tools or on-demand production models. For example, instead of producing thousands of items upfront, companies are looking at ways to allow attendees to order personalized products at the event itself, reducing the need for large orders and cutting down on surplus inventory.
The Role of Technology: Virtual Swag and Digital Engagement
Another growing trend in the promotional products space is the increasing use of virtual swag and digital engagement tools. With the rise of hybrid and virtual events, more organizers are offering digital swag bags, which can include discounts, coupons, downloadable content, and branded digital experiences. This shift has helped mitigate some of the effects of tariff increases by reducing the need for physical product shipments.
Long-Term Outlook: Adaptation and Resilience
The trade tensions between the U.S. and China have already had a profound impact on the promotional products industry, but there is hope that businesses will find ways to adapt. Many are looking for new suppliers, exploring sustainable alternatives, and leveraging technology to reduce costs. While the road to recovery may be long, these efforts are helping to transform the landscape of both the promotional products sector and the events industry as a whole.
As tariffs continue to shape the industry, businesses and event organizers must be creative in navigating the new normal. With rising prices and shifting expectations, companies will need to evolve quickly to remain competitive and meet the growing demand for high-quality, impactful promotional products that engage audiences in meaningful ways.
The effects of the U.S.-China trade war are far from over, and as the tariffs continue to reshape industries like promotional products and meetings and conferences, it’s clear that businesses will need to adjust their strategies to stay afloat. For many, this may mean rethinking supply chains, reevaluating pricing strategies, and embracing innovation—qualities that will be crucial in navigating the evolving landscape.