Gifting has likely already joined the many line items in your event budgets which have trended upward since Covid, and because of an action taken last week by President Trump, it could go up even more—or be newly mired in red tape.
What happened is this: A tariff loophole known as the de minimis exemption was closed. It had allowed foreign shipments valued at $800 or less to enter the United States without paying tariffs and filling out complicated customs paperwork. Every day last year, nearly 4 million such shipments—1.36 billion in all—crossed our borders, reports U.S. Customs and Border Protection.
That same exemption closed in May for shipments from mainland China and Hong Kong. Now it’s gone altogether. And subject to the volatility of today’s tariff-scape. Depending on where shipments come from, tariffs could range from 10% of the value of the goods to 30% or more. Observers say these extra costs will inevitably result in higher prices.
Learn More: Event Organizations’ Concern About Tariff Impacts
How might this affect events? Well, let’s say one of your gift programs has been based on individual attendee selections of, for example, a pair of customized Ray-Ban sunglasses. Previously, fulfillment, if shipped from abroad, would have had no tariff applied. Now it will. If you ordered 100 pairs of Ray-Bans for a gifting event, on the other hand, the de minimis exemption never mattered.
In that latter case, “the standard—and ever-changing—tariff rate for that product would apply,” in the words of Terry McGuire, senior vice president of HALO, a leading supplier of branded gifting solutions for the events industry. He says HALO buys around $650 million in goods yearly, of which 90% are manufactured overseas, then imported to the U.S. for its suppliers to apply your desired logo.
“We have been laser-focused on strategies to reduce the impact of tariffs on our customers’ pricing for quite some time,” McGuire, who manages HALO’s supply chain and helps clients traverse this challenging landscape, says. The de minimis exemption, he notes, had for years been a boon for overseas retailers. “It was particularly useful for apparel and small electronics—products with a relatively high perceived value that were relatively inexpensive to ship to the U.S. via air freight for quick delivery.”
Why was the exemption ended? In addition to the added revenue to be collected in tariffs, President Trump blamed his decision on abuse by fentanyl smugglers and shippers who took advantage of the loophole to intentionally exceed the $800 limit.
Don’t Ship by International Mail Anytime Soon
Trump’s order has already disrupted supply chains, according to news reports, in large part because he also mandated that our customs officers would no longer be responsible for assessing the amount of tariffs owed on packages sent via international mail. Now foreign post offices must do that calculation themselves—or hire a third party to do it and pay U.S. customs.
As a result, many foreign post offices, unequipped to comply with the new reality, have completely stopped shipping to the U.S. for the immediate future, at least. Express carriers like UPS or FedEx are more expensive, but they can calculate and pay the duties.
Bottom line: Work more closely than ever with your gifting vendor, not only to select the perfect branded merchandise, but also to buy at the most advantageous fulfillment cost.
