4-16-2025

The 145% levy rates on China have companies in the merch space halting orders and shipments from that country, and worrying about inventory shortages and importing upheaval, stoking COVID-Era supply chain fears.

To be clear, promo suppliers haven’t simply abandoned China for good for manufacturing purposes. That would be nearly impossible to do, given years and decades of building supply lines there. While supplier leaders indeed say they’re increasingly searching for destinations outside of China to produce product, they note that the reality is for certain types of hard goods in particular, there’s no viable alternative to Chinese production.

With that understanding, supplier executives state that what they are doing is undertaking a pause in bringing in shipments from China – and in instances halting ordering from factories there. It’s simply too expensive to bring shipments to the United States at the current tariff rate, given realistic cash flow and available financing, some supplier executives say. The hope is to see an agreement put into place that will result in the U.S. tariffs on China-made products being significantly lowered.
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4-7-2025
To keep our clients in the loop with what is happening in the apparel world, this has come down the pipeline from one of our biggest warehouse suppliers. The reality is, without fearmongering, if you have plans on making a purchase, now is the time.

"The new tariffs begin at 10% and go as high as 50% for countries that run significant trade imbalances with the United States. While our supply chain is diverse—we produce in 24 countries—all of our factory partners are affected by tariffs to some degree. This includes Vietnam (46%), Bangladesh (37%), Myanmar (44%), Madagascar (47%), Sri Lanka (44%) and China (34%). The reciprocal tariffs are stacked on top of any existing tariffs, meaning that the new tariffs on China are added to the 20% tariffs instituted earlier this year.

What this means for you:

In the short term, SanMar will begin to pay the new tariffs. We have production orders placed many months in advance. We'll honor those orders with our partners and begin to import goods at the new higher prices.
We’ll make a single price change starting June 1, with the plan to hold that change through 2025. Instead of a product-by-product or country-by-country approach to pricing, we’re working to determine an increase that is sufficient to balance the higher rates from the countries listed above with the lower rates from other SanMar sourcing destinations. Our thought is that this simplifies things and makes pricing more predictable. While it won’t be an insignificant amount, we will do everything we can to minimize the increase. We’ll update you next week with full details.
As soon as possible, we'll shift as much production as we can from high-tariff to low-tariff countries like Honduras, where we make most of our Port & Company and District t-shirts.
If that strategy is successful, and if countries can negotiate lower tariffs, we would expect that prices will come down in 2026. "
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