Before anyone accuses me of being Anti-Trump or somesuch nonesense let me say this. I am a Canadian and cannot vote in the USA. I personally do not care who is President. I also think that the current business climate is pretty good and the economy’s rosey health allows me to employ a number of American citizens.
“In short I have no dog in this fight so please before you send me some nasty email don’t, this info is for your info on the promo business!”
Back in 1992 (The Dark Ages), I was one of the first promo suppliers to go directly to China (and other countries) to source finished goods for the North American and European markets.
My job was to be the head of the import hammer for a very large denim factory that produced goods for Levi’s, Lee, Wrangler plus our ad specialty division called ID Wear. At that time there was numerous tariffs, duties etc in place which made importing finished goods from China to the US very very dificult.
Originally there were T&D (Tariffifs and Duties) in place to protect the American manufacturing market not because China was an economic threat, but because China was a Communist country and a global political threat.
As you will remember, China, in 1993 was just emerging from the Tiananmen Square Massacre of 3000 of their own citizens.
In 1993 their economy was just slightly ahead of Afghanistan/Pakistan region and just below that of Italy. See below.
“Since 1993 a lot has changed!”
Sometime in the early 2000’s, China received “most favored nation status” from the USA. This basically meant we in the west no longer cared that they were/are Communist and instead we wanted to do business with them. Basically we all went crazy in an effort to do business with China….”It was Belly up to the bar boys lets make money, who cares if they’re Commies! 🙂 ”
“As the years ticked by, 93, 96, 98, 2000 etc… all T&D’s slowly got to be less costly and required way less paperwork.”
This slow rollback of T&D was an intentional move by the US Gov’t to allow American manufacturers who made products for our domestic wholesale and retail markets (such as goods for the Promotional Products industry) to have a long time to get their factory’s more lean and competitive.
or…alternatively…to turn get those same American Manufactuers (circa 1993-2005) to become an American Importer of the same finished goods.
During this period (circa 1993-2005) virtually all of the large USA based promotional product factories that made everything at that time from molded custo products to keychains to lanyards, stainless steel waterbottles, clothing, et etc etc.. here in the USA, all but dissapeared.
Along with the US promo factories closings we also lost all the skilled laborers who made these goods. They either retired or went on to a new career.
“In short…Most people who worked in American factories from 1993-2005 are now doing something completely different. They are working elsewhere, the unemployment rate today is at historic lows, they have to be”
Our denim factory employed nearly 400 denim sewers and cutters. Since 2006 it is fully closed.
These skilled positions often employed multi-generations of the same family (mostly immigrants) all working at low wages. We paid low wages so that the jeans and denim goods we made were affordable to the American consumer. If we paid more we were not competitive and they went to Turkey, Eastern Europe, Asia..etc.
“It is now almost 2019, these formerly skilled low wage domestic factory workers have not laid denim to Juki in 14 years. They no longer are skilled in that field of manufacturing and are making more money”
Think About It This Way. If I could open a jeans factory and hire them all back at their old jobs they would A) not know what to do as they have long lost those skills or B) Have succesfully gone on to other careers.
I have imported since 1993 and during the period 93/2005 we had to fill in HS codes, arrange to pay duties and brokerage everytime we imported a sample or a boatload of goods (read more)
The paperwork was the worst as in1993 there were over 14,000 of these codes each one specifically link to a specific product. Each code triggering a different tax/duty rate.
Think of it this way, a 100% stainless steel waterbottle is one code (ie HS 18112XXXX) and has a tariff rate as of January 2019 of 25%.
However a plastic lined stainless steel waterbottle (75% stainless steel, 25% plastic) has a different HS code (ie.HS 18332XXX)…this code has a lower tariff/duty of 12% as of January. If you don’t know the new codes you will likely pay the highest tax, not the correct tax!
“I expect that the promo supplier who imports and warehouses goods will raise their prices to the highest possible amount in a profit grab and blame it all on the new Tariffs!”
As a direct promo supplier/importer, we are already seeing a growing storm of problems, barriers. Thankfully, we have prepared for this eventuality as we saw this possibly coming over the past 12 months.
We are already seeing US customs requiring more precise documents, accurate HS coding and tons of paperwork. So much so that we have hired 2 extra people, one here in the USA and one in China to deal specifically with these issues.
Unfortunately there are NO DOMESTIC manufacturers to take up the slack and fill in the supply chain as prices and products from China go up as a result of the new tax.
Think about TV’s. TV’s have not been made in America for over 20 years.
In 2019, no business investor/entrepreneur in their right mind will ever start a USA made TV factory here. Why you ask?
Firstly way too much capital outlay, Secondly, no skilled workforce!
The bit above about TV’s can be applied to tons of other industries, many that affect our promo business.
T shirts, wearables, backpacks, tools, coffee mugs etc etc are NOT GOING TO BE MADE IN THE USA and even if were to make them THEY WILL STILL BE MORE EXPENSIVE THAN THE IMPORT INCLUDING T&D, BY A LONGSHOT.
We can help!
We are a different kind of supplier. We only sell to Distributors. However, we are no longer ASI any more (read why)
We don’t sell everything but what we sell is cool and in demand, DISTRIBUTORS LOVE how we do it!
We ONLY import and we ship direct to your door from our factories in China. Most orders logo’d and delivered in 7-9 days.
We Do NOT charge extra for shipping, set ups, 4 color…nothing. We provide you one single price including all costs, yes including any new T&D’s if you wish!, delivered to your door.
If you need help and or more detailed information, feel free to call us at 1-888-908-1481 or email [email protected]