Classic Distributor Partners and Friends:
Lots of questions, speculation, and intrigue are swirling around tariffs and all things tariff related. Even if you try to avoid the news, you’re still hearing about tariffs along with inflation, gas, and eggs.
So the big question is — “Will this affect Classic’s prices?” Which is a fair question since Classic, like other builders, uses a lot of aluminum, which is tied to the 232 tariff on steel and aluminum.
Short and simple answer is prices will increase on selective items. No companies can absorb the ongoing increases along with those in March. Some suppliers have intimated that these increases will not impact their pricing. Frankly, that’s foolish to say or to believe.
Classic’s History with Imports
Allow me to share some history (and to cushion the overall message). Years ago, we (Classic) moved several profiles from China due to the ADD law/ruling (see definition below).
We “onshored” those profiles to domestic extruders, then made secondary dies for about 12 common profiles for a supplier in Vietnam. As a result, the original China tariffs were negligible, but the ADD fees on our containers from Vietnam have continued to increase.
So, what about the price increases? Over the past few years, we have absorbed some of the increases rather than implementing across the board price changes. Instead, we made targeted increases based on those materials. It made no sense to increase an entire kit design by 25% when the laminated wood components and graphics weren’t affected.
Starting in March, if you purchase aluminum components from us or a Gravitee Modular Frame, it will be a bit more. Ranging from 8% to 15% depending on the profile and where we have it pressed.
Now, here’s where the tariffs get a bit more complicated. For example, why would any of the profiles you press in the US be increased? Well, the “devil is in details.” Most of the aluminum billets used at USA extrusion plants come from offshore locations. As their prices increase, they pass those prices along to us.
Are you still with me? I know this isn’t a sexy topic. Bear with me a little longer as I share some tariff background.
Background Information about 232 and 301 Tariffs
Rob Cohen from DSL and I have represented our industry, via EDPA Advocacy, on all things tariff related for the past 6-7 years now. We speak monthly with other industries and to countless elected officials in and around DC.
Here are some Cliff Notes that I think are important as you absorb the news regarding tariffs. Specifically, the 232 and the 301 tariffs:
232 – Steel and Aluminum Tariff
301 – Finished Goods Tariff – electronics, machinery, toys, plastics and much more
1. Tariffs are apolitical
- Trump 1.0 Tariffs added to China
- Biden renewed the tariffs as they were set to expire and was working on and implementing increases and expansion to tariffs during his 4-year term
- Trump 2.0 tariffs
- Tariffs have generated over $300 BILLION in revenue for the US government. (do you think they want to see that go away?)
2. Section 232 and 301 tariffs are two different categories of tariffs on top of tariffs that already existed
3. No Exemptions
Under the new additional proposed tariffs (going into effect in March 2025) – there is no right to file for any exemptions or exclusionary language.
This is the HUGE detail that gets overlooked by many. Basically, even if you are a top 10 business in the US economy, after March 12, 2025 all tariffs in place, existing, additional or reciprocal, will affect ALL US Businesses bringing items in from offshore
4. Congress has no authority to legislate tariffs! None.
- The US Trade Representative (USTR) has this authority and is guided by the Executive Branch (President) only
5. As of today –
Tariffs are to be imposed on goods from ALL countries that apply tariffs to the importation of goods from the US
6. We get asked all the time.
- “Can’t you just get the materials you need in another country?” NO, all countries are now “likely” to subject to the tariffs in the coming weeks/months and varying percentage rates.
- It’s very expensive to get new safety listings (UL) for electrical parts – New molds for extrusions…items like this must be created new when you change factories let along countries. And even in the US you cannot use the same molds or listings from one factory to the next
- We have not even discussed the subject of the cost of mfg in the USA
7. General matters to consider:
- The HTS code assigned to a product impacts the amount of the tariff to be paid
- Companies cannot stop innovating because of the imposition of tariffs. We must continue to still be creative and develop products that will enhance face to face marketing
- We are all in the same “boat” professionally and personally
- There is a workforce development challenge in the US. Even if we were to move all manufacturing back to the US – the workforce does not exist to handle the additional manufacturing load
- Last 12 months have shown a decline in the number of people who are members of unions.
- Many of the NEW tariffs coming are not “replacing” the existing ones, they are being layered atop the existing ones
- Port fees go much further than just the tariffs you hear daily about today in the news. With aluminum for example you have the ADD fees (Anti-Dumping fees) which can range from 25% to 125% of the invoice value of the material you are bringing in depending on which country it is coming from. This determination is made by CBP (customs) at the port based on your manifested items
- A BIG note worth mentioning is the specifying language now in the ADD documentation. It specifically includes “tradeshow display fixtures and framing”
This is all a moving target so be watchful of “reciprocal” tariff talk. It could be even more impactful on us all, again personally and professionally.
In Simple Terms
Let’s look at Indonesia. Indonesia charges approx. 37% tariff on all US imports. So, if the current administration decides to apply a reciprocal tariff to all things coming from Indonesia, then we would need to consider the impact. Look at the volume of plywood (various species) used in the US for home building, exhibit building, and more. Many retailers and lumber brokers source from Brazil, Indonesia, Vietnam, Canada and Europe for our sheet goods (wood).
I don’t say this to scare anyone. Rather you need to be prepared should the reciprocal tariffs take effect in any meaningful way in the coming months.
Again, my apologies for this long-winded update/post, but I wanted to give you some context to the “why” when it comes to any price increases you may see not only from Classic but also from all suppliers.
I thank you all for your ongoing partnership for the past 33 years. We are grateful for your trust in us as your private label manufacturer.
— Kevin Carty, Executive Vice President
For over 30 years, Classic Exhibits has been designing and building creative custom solutions for our Distributor Partners and their clients. As North America’s largest private-label exhibit manufacturer, we have the unmatched capability, capacity, and creativity to create 3D projects ranging from 10 x 10 inline displays to 60 x 80 double-deck islands.
Find success on the trade show floor with an exhibit that reflects your marketing message. For more information, see www.classicexhibits.com and explore Exhibit Design Search or request a meeting with a Classic Distributor Partner.