Tariffs for China, Mexico Could Affect More than Imports
After looking into the effects of promotional products on the election as a whole, and speaking to two members of the industry about how Donald Trump's victory could impact the promotional products sphere in general, we want to address a specific issue that could create even more of a shakeup in the industry.
As part of Donald Trump's plan for president, he wants to impose a 45 percent tariff on products imported from China and 35 percent on those from Mexico. In addition, in his plan for his first 100 days, he wants to "label China a currency manipulator." For an industry that does import products from mainland China, this is an interesting thing to consider.
Jack Ma, founder and CEO of Chinese e-commerce behemoth Alibaba, directly warned that Trump's scornful attitude toward China could be negative for both parties.
"If [China and the U.S.] don't work with each other, it's going to be [a] disaster," Ma told CNN Money.
Ma added, however, that he doesn't see Trump going through with his plan. But, that's purely his own speculation at this point.
"I don't fear [a Trump presidency]," he added. "I think a healthy and positive China-U.S. relationship is so critical."
In an article published in The Los Angeles Times in July, Peter Navarro, a policy advisor to Donald Trump during his campaign, wrote that the tariff would apply to "any American trade partner that cheats on its trade deals using practices such as currency manipulation and illegal export substitutes."
Mexico and China are two of the most important importers to the U.S., and many promotional products suppliers import products from overseas. What's more, as Time pointed out, tariffs don't just keep foreign products out, it could affect domestic manufacturing as well.
First, the tariffs hit not just Chinese and Mexican manufacturers, but American ones too. A 45 percent tariff on phones brought in from China hits U.S. parts producers and designers. And a 35 percent tariff on Mexican imports also effects auto parts that go into … yes, cars made inside the United States, like the Ford Expedition SUV. The result? Prices go up across the board, even if you've been trying to "buy American."
What do you think?