Donald Trump’s 10% tariff is an unwelcome development for many in the UK gift industry, especially for those companies who have worked hard at building their brand in the US. The tariff creates added pressure on pricing and margins, with price increases looking increasingly likely.
Despite a 90-day pause for around 60 of America’s trading partners hit by higher US tariffs, and the President authorising a universal lowered reciprocal tariff of 10% as negotiations continue, China is excluded from this pause, with Trump increasing the tariff on China to 125% after Beijing retaliated and increased the tariff on imports from the US to 84%.
Sam Wahid, owner and managing director of Gift Republic, confirmed that the increase in tariffs on Chinese imports by the Trump administration is already having a direct impact on the company’s US-facing business. “As an export-focused company, additional costs at the border inevitably put pressure on our margins and create real challenges around pricing and planning,” he points out.
“We are doing everything we can to absorb these increases in the short term, but if the tariffs remain in place, a price increase will unfortunately be unavoidable. In response, we’re actively reviewing our product ranges, sourcing, and supply chain strategies to minimise disruption and remain as competitive as possible in the US market.
“We are also reviewing every container leaving China for the USA to assess whether it makes sense to hold shipment while we monitor developments—though we would never delay a shipment if it would impact our customers. It’s a delicate balance, but one we believe is necessary to navigate the situation responsibly.
“We’ve successfully managed major global challenges before, including the financial crisis and the pandemic, and we’re approaching this with the same agility and resilience—always with our customers and retail partners at the heart of our decision-making.”
At Gisela Graham, commercial director Mark Jones comments: “The unpredictable nature of the US administration means all you can really do is keep calm and carry on for the time being. You could have spent the past few weeks planning for initial raft of tariffs only to see the rules you were working towards ripped up and replaced almost on a whim.”
Continues Mark: “On the surface it may seem like the UK had a relatively favourable position, with only a 10% tariff, but if your goods are made in Chinathey should incur the far higher rates being imposed on them.
“In theory, the tariffs mean domestic US giftware companies importing goods from China have a huge advantage over foreign competitors as they only pay the tariff on the imported/factory price of the goods as opposed to the wholesale price. In practice though, the incredibly high rates applied in either scenario are likely to price the items out of the market.”
Mark adds that if the ‘trade war’ between the US and China continues into the summer there will be further disruption. “It’s likely to result in an over supply of goods in the Far East, and a lot of spare capacity on shipping, but it is incredibly difficult to predict next week let alone that far in to the future. Whatever the outcome, there are likely to be challenges and opportunities. All business really crave is certainty so we can plan and that cannot come soon enough!”
Wrendale Designs’ founder and co-owner Hannah Dale has spent a decade building the Wrendale brand in the US, with the company employing its own sales team and developing relationships with stockists across every state. “The tariff announcement is likely to deeply impact us in its current form – many products may no longer be viable to sell to our US customers,” Hannah told GiftsandHome.net’s sister newsletter PGBuzz. “On the face of it, the news is pretty devastating.”
Sanjay Aggarwal, co-founder and chief spice officer at Spice Kitchen, which sells spices and gift boxes, said its plans to expand in the US were now under threat. “It’s a scary time because, as a business, we see the US as a really big opportunity for export. We have invested loads in the US over the last 18 months, and this sort of tariff puts a lot of that into question. The tariff implications are wider than the 10% itself and are clearly having wider implications on the global economy.”
As Bubblegum’s founder, Courtney Wood, says: “President Trump has thrown a star-spangled spanner in the works of the world economy. He may have a screw loose if he thinks this will tighten up business in the US.”
Top: Donald Trump’s tariffs have sent shockwaves through the world’s economy.
