Tariff Impact Information for Our Partners
Please read the following statement for an overview of how DEMDACO plans to manage the impacts of new tariffs on goods imported from China.
Letter from DEMDACO's President, Lance Hart:
Dear Valued Partners,
The government has recommended and is implementing tariffs on over $200 Billion worth of goods imported from China. Many of DEMDACO’s products will be affected. Any product subject to tariffs will receive a 10 percent tariff if it is imported between 9/24/18 and 12/31/18. If that product is imported after 12/31/18, it will be subject to a 25 percent tariff.
What steps has DEMDACO taken to address the tariffs ?
- Two representatives from our company went to Washington to lobby against tariffs.
- By the end of 2018, we will request Washington make an exclusion be made on specific product items that are subject to tariffs.
- We have discussed the potential to move production from China to other countries. One of our major strategic initiatives the next few years will be to source alternative production facilities outside of China.
- We are proactively discussing with our factory partners how to exit certain product categories/material composition subject to tariffs. This strategy may be moot if the US escalates its tariff policy to cover all products imported from China.
- We are working with all Chinese factories to expedite the delivery of product to the US prior to 1/1/2019 minimizing the tariff impact.
While it is not our desire to increase prices, I am hopeful you can understand this type of increase in costs cannot be fully absorbed by us. With that in mind, we will proceed as follows:
- New and existing orders shipped before 12/31/18 will not be subject to any price increases despite the fact that tariffs imposed are already impacting our company.
- New and existing orders shipped on affected items (excluding Willow Tree skus) after 1/1/2019 will be subject to a 9.5% price increase.
- Orders shipped on affected Willow Tree items after 1/1/2019 will be subject to a price increase. The price increase shall be determined near the end of November and communicated at that time.
We are hopeful that the United States and China will come to a quick resolution of the differences that have led to this trade war. However, the current situation is fluid and it is not readily apparent that a quick end to this conflict is in sight. If further increases are necessary, we will communicate as appropriate.
Thanks for your support in the past, now and in the future.
Please contact your Territory Manager or our Customer Care team at 1-888-336-3226.
Download the letter
Price Increase List
Download the price list
What is a Tariff/Tax and why does that increase my prices?
A: A tariff is a tax on imported goods that is imposed by our government to increase competitiveness for domestic produced goods and in this case to punish China for what is believed to be unfair trade practices.
Is the Tariff a Tax by the Federal government?
What is the actual Tariff/Tax percent?
A: Beginning in September of 2018, a 10% tax went into effect which DEMDACO has absorbed. On January 1, 2019, the tariff increases to 25%
Will there be other product categories that are affected by future Tariffs/Tax?
A: This is an open question, but a possibility, if the Chinese government doesn’t meet demands he has set forth, and the United States don’t find resolution.
Does all product in all categories have an increase due to Tariff/Tax?
A: Today, there have been 3 lists created with various products. It only effects some of our products so far. However, there is the potential for President Trump to push the tariff to ALL Chinese imports as mentioned above. Specific to DEMDACO, only certain sku’s have been impacted so far.
Do the Tariffs/Tax apply to all countries DEMDACO imports from?
A: The tariffs that are affecting our industry right now are only on imports from China.
I placed order before the price increase announcement so why do my prices have to go up because of a Tariff/Tax that is effective January 1, 2019?
A: The tariff is based on when products ship from China. We implement increases to applicable product when it ships from our distribution center.
What has DEMDACO done to absorb and/or minimize the Tariff/Tax?
A: We sent DEMDACO leaders to Washington to argue against the inclusion of our impacted sku’s. We have talked to factories about moving to other countries as well as looking ourselves to source from other countries. Lastly, we are absorbing a large portion of the Tariff.
Why are we learning of the increased prices today when the Tariffs/Tax was announced months ago?
A: The gift industry has been busy trying to figure out exactly which sku’s are impacted as well as figuring out import strategies. We have been examining product to see if we can change the composition so that it is exempt. Lastly, we have spent time with the pricing to see what we are financially able to absorb. DEMDACO is absorbing over half of the 25% Tariff/Tax increase.
Since Tariffs/Tax were known months ago why does the catalog not reflect the new prices?
A: As stated above, there was a lot to manage to see what could be impacted. We produce our catalog earlier than most and made the decision to still launch on time and adjust as necessary.
If Tariffs/Tax are reversed/reduced will my prices go down and will I get a refund?
A: We will evaluate that circumstance as it becomes known.
What are other companies doing to deal with this issue?
A: All companies are taking action to review pricing and adjust as necessary.
How do you suggest that retailers handle or communicate the item/Tariff/Tax increases to customers?
A: We intend to create a video that would be available for retailers to view or even share with their customers/consumers.
Will the Tariff/Tax have an impact on freight costs?
A: There is no impact to freight cost.
If I take shipment of any item(s) that you have in stock before Dec 17 will my price(s) still increase?
A: No, they will not. Now, the new line is not available yet, but certainly carryover items may be ordered in advance of the change at current pricing.