One thing we get asked about is how the U.S. tariffs imposed on China imports affects us and the trade show display market. Since we are in the ‘physical product’ space with many of our frame systems being made out of aluminum and other materials subject to this tariff, it is no surprise that we are indeed affected by the tariffs. I wanted to write an article that talked a little bit about what is impacted and how it is impacting our industry as a whole. While I admittedly haven’t done a ton of research on this topic (outside of our own experience), I will be leaning on my trusty economics background and recent events to paint a picture of how all of this applies to our wonderful trade show exhibits industry.
U.S. Imposed Tariffs on Chinese Steel & Aluminum
First and foremost, let’s briefly explain where we are and how we got here. The Trump administration in an attempt to make trade deals more equitable and fair and bolster domestic production announced in 2018 his intention to apply a 25% tariff on steel and a 10% tariff on aluminum. This kick-started the trade war with China and has since escalated.
Since a tariff is essentially treated the same as a tax when measuring the economic impact, it makes imported aluminum & steel more expensive… AND it also makes domestic and other sources materials more expensive. As Chinese goods become more expensive, companies in search of other sources create an increase in demand and prices rise (even for domestic manufacturers).
How the Tariffs affect your Trade Show Display
As we just saw from our brief description above, the tariffs lead to rising costs on the basic materials used in the mode of production. From lawn chairs, cars and of course trade show exhibits, there is a higher price associated with production and those costs are either:
A) Absorbed by suppliers in the supply chain (a company willing to take less profit in exchange for not raising prices as much)
B) Companies will pass the increase in costs along to the consumer resulting in higher prices paid for goods most affected by these materials
Right now we are looking at different options but it will most likely be a combination of A & B. Depending on which trade show display system we talk about, the materials might be made of materials imported from China or from domestic aluminum. Take the TRIGA frame system for example. This is made entirely from USA aluminum and while there might be an increase in price we don’t anticipate the increase to be as dramatic as some of the other exhibit systems like the RPL Back Walls or Silver Step Banner Stands that do use imported hardware components.
How Tariffs Affect Imported Containers
The tariff cost is felt immediately when importing a container full of goods that are ‘marked’ for payment.
Here is a simple example of how this looks:
Let’s suppose a container of trade show display frames is imported from China to the USA with an imported value of $100,000 and there is a 25% tariff applied. That container cost is now $125,000 landed.
We are trying to minimize the impact on our customers which can mean a combination of absorbing the cost, sourcing materials to a lower tariff environment (like U.S. based materials or from other countries) or innovate products less reliant on the goods most impacted by the tariffs.
Planning your Trade Show Exhibits around a Trade War
As you and your team plan your marketing budget, make sure to take some of these increase in costs into consideration. If something looks a little more expensive than it did the last time, it might be tariffs that are the culprit.
The good news is over the last 10 years or so there was actually a sizable decrease in costs for many trade show exhibits. The technology improvements combined with a decrease in the cost of printing equipment, materials and overall efficiency led to a slow but steady decline in many products that used to be much more expensive. To a certain degree, this has taken some of the sting out of the tariff impact.