Tariffs were the defining story of the promotional products industry in 2025, and the ripple effects continue well into 2026. Rates shifted with little notice, costs climbed sharply, and supply chains that had relied on a single sourcing hub for decades were forced to diversify almost overnight.
For organizations that invest in branded merchandise, awards, and recognition programs, the impact is real. Product prices have increased, lead times have shifted, and the countries where your branded items are manufactured may look very different than they did two years ago.
This is not a political analysis. It is a practical guide to what happened, where things stand now, and what it means for your next order of branded swag, awards, or promotional products.
What Happened: A Year of Record Tariffs and Price Increases
The numbers from 2025 paint a dramatic picture. U.S. customs revenue surged from approximately $71.5 billion in 2024 to more than $265 billion in 2025, a 271% increase according to the U.S. Bureau of the Fiscal Service. The single highest month for tariff collection was October 2025, when the government collected $31.4 billion, nearly half of the entire 2024 annual total in a single month.
For the promotional products industry specifically, these costs were felt directly. The average effective tariff rate jumped from roughly 2.6% at the start of 2025 to as high as 17% in April when China-specific tariffs peaked at 145%. Even after the Supreme Court struck down certain reciprocal tariffs in February 2026 and a global 10% rate was implemented, the current estimated effective rate sits around 12.2%, according to The Budget Lab at Yale. That is still nearly five times the rate at the beginning of 2025.
The result for buyers: nearly 90% of promotional product distributors raised prices during 2025, by an average of 11%, according to ASI Research. Two-thirds of suppliers also raised prices. While the North American promo industry recorded $27.7 billion in sales for 2025 (a 4.2% increase and a new record), much of that growth reflected higher prices rather than increased order volume.
The takeaway: The cost of branded merchandise went up meaningfully in 2025, and while some relief has arrived, prices have not returned to pre-tariff levels.
The Sourcing Shift: Moving Beyond China
One of the most significant long-term effects of the tariff environment is a structural shift in where promotional products are manufactured. China has been the dominant production hub for the industry for decades, but its share of U.S. imports dropped from an average of about 13% monthly in 2024 to roughly 8.5% by the second half of 2025, according to U.S. International Trade Commission data.
Promo companies accelerated their exploration of alternative sourcing countries throughout 2025. Vietnam, Bangladesh, India, Turkey, and Mexico all emerged as growing options, though none individually comes close to matching China’s manufacturing capacity. According to ASI’s State of the Industry Report, 30% of suppliers strongly agreed that they were actively exploring new sourcing countries due to trade uncertainty with China, the highest percentage in five years.
The diversification has been cautious rather than dramatic. Several industry leaders noted that shifting production is a multi-year process. Certain product categories, particularly hard goods like drinkware and technology accessories, remain heavily dependent on Chinese manufacturing because comparable facilities simply do not exist at scale elsewhere. Apparel and textiles have been easier to move, with countries like Bangladesh, Vietnam, and Central America absorbing more production.
Mexico has been a particularly interesting case. It was already the top source of imported products to the U.S. in 2024 (surpassing China for the first time in two decades), and imports from Mexico remained relatively stable in 2025. Many imports from Mexico qualify as duty-free under the U.S.-Mexico-Canada Agreement, making it an attractive nearshoring option.
The takeaway: The promotional products supply chain is diversifying, but it is a gradual process. China remains essential for many product categories, even as companies build alternatives.
What This Means for Your Branded Merchandise Budget
If you are planning a branded merchandise program, a recognition program with custom awards, or an event swag order in 2026, here is what the tariff landscape means in practical terms.
Expect prices to remain elevated, but stabilizing. The sharp increases of mid-2025 have moderated, and some suppliers have been able to reduce prices on specific items as tariff rates came down. However, a broad return to pre-2025 pricing is unlikely. The current global 10% tariff floor means imported products will carry higher baseline costs for the foreseeable future.
Plan further ahead than usual. The volatility of the past year taught the industry that rates can shift quickly. Suppliers recommend placing orders earlier to lock in pricing and avoid last-minute surcharges. If you have a known event date or recognition ceremony, starting the conversation with your awards and merchandise partner well in advance gives you more flexibility.
Ask about sourcing and lead times. Not all products are affected equally. Items sourced from countries with lower tariff rates or manufactured domestically may offer better value. Your provider should be able to explain where products are made and how tariff exposure affects pricing. Award Maven’s U.S.-based manufacturing network helps minimize tariff impact on many items in our catalog.
Consider value over volume. When budgets are tighter, the temptation is to order cheaper items in larger quantities. But the data consistently shows that higher-quality products generate more impressions, last longer, and create stronger brand associations. One well-made branded tumbler that gets used daily for years delivers far more value than a box of cheap giveaways that end up in the trash.
The takeaway: Smart planning, early ordering, and a focus on quality over quantity are the best strategies for navigating the current pricing environment.
💡 Related reading: How High-Quality Branded Swag Boosts Brand Loyalty — why investing in premium items delivers better ROI, especially when budgets are under pressure.
The Bright Spots: Why Promotional Products Still Deliver
Despite the pricing pressure, the promotional products industry continues to grow because the channel fundamentally works. A single branded drinkware item generates more than 3,100 impressions over its lifetime. Research shows that 83% of consumers say receiving a promotional product makes them feel appreciated, and 87% keep items for longer than a year.
A recent 2026 study by ASI and PPAI also found that promotional products generate up to eight times less carbon per memorized impression than digital advertising, making them both effective and comparatively sustainable.
The tariff environment has not changed these fundamentals. If anything, it has reinforced the importance of choosing quality branded merchandise that delivers long-term value rather than disposable items that waste both budget and environmental resources.
For organizations investing in employee recognition, client appreciation, or event marketing, branded products and custom awards remain one of the most cost-effective ways to create lasting impressions and strengthen relationships.
💡 Related reading: Top Trending Branded Swag Items Employees Actually Want — the items that deliver the most impact per dollar in the current environment.
Looking Ahead: What to Watch in 2026
The tariff landscape remains fluid. The current global 10% rate is set for at least 150 days, with potential adjustments depending on Congressional action and ongoing trade negotiations. Steel and aluminum tariffs remain elevated, which directly affects product categories like drinkware, multi-tools, and metal awards.
Industry leaders across the supply chain have signaled that they are staying nimble and diversified rather than making dramatic shifts in response to any single ruling. The consensus is clear: flexibility and transparency are the defining strategies for 2026.
For buyers, the best approach is to work with a partner who understands the landscape, communicates openly about costs and lead times, and helps you make informed decisions about sourcing, materials, and program design.
Award Maven Is Here to Help You Navigate It
At Award Maven, we maintain transparent, up-front pricing and work closely with our clients to optimize programs around current market conditions. Whether you need branded merchandise, custom awards and trophies, or a full recognition program designed around your budget and timeline, our team can guide you through the details.
👉 Schedule a consultation to discuss your upcoming program. We will provide clear pricing, realistic timelines, and product recommendations that make the most of your budget.
FAQ
Q: How have tariffs affected promotional product prices in 2026? A: Tariffs caused nearly 90% of promotional product distributors to raise prices by an average of 11% during 2025. While some prices have moderated following the Supreme Court ruling and the shift to a global 10% tariff rate, most products remain more expensive than pre-2025 levels.
Q: Where are promotional products manufactured now? A: China remains a major manufacturing hub, but its share of U.S. imports has declined. The industry is diversifying into Vietnam, Bangladesh, India, Turkey, Mexico, and Central America, though the shift is gradual and varies by product category.
Q: Will promotional product prices go back down? A: A broad return to pre-2025 pricing is unlikely. The current global 10% tariff floor means imported products will carry higher baseline costs. However, prices have stabilized compared to the peak volatility of mid-2025, and some suppliers have reduced prices on specific items.
Q: How can I get the best value on branded merchandise during tariff uncertainty? A: Plan orders further in advance to lock in pricing, ask your provider about sourcing and tariff exposure, prioritize quality over quantity, and work with a partner who communicates transparently about costs and lead times.
Q: Are U.S.-made promotional products a good alternative? A: U.S.-made products avoid import tariffs and have seen increased interest, particularly ahead of America250 celebrations in 2026. However, domestic manufacturing is generally more expensive and has limited capacity compared to overseas production. A balanced approach that includes both domestic and international sourcing often delivers the best results.