The US Greeting Card Association has gone right to top to make its pleas heard for greeting cards (produced in China and imported into the US) to be removed from the tariff list, which if not successful will see them be subject to an additional 25% tariff in a few weeks time.
Following hard-hitting written testimonies to the US International Trade Commission for greeting cards to be excluded from the imminent round of tariffs, US GCA president George White, president of 3D card company Up With Paper’s and Hallmark’s federal affairs manager Sarah Moe Meyers were granted the opportunity to speak yesterday (June 19) at the US Trade Commission in Washington DC, in an effort to protect, not just the American greeting card market but those publishers who also export to the States.
George and Sarah were granted a five minute slot at the hearing to make the case why greeting cards should not be subject to such tariffs, stressing the negative impact they would have on such a creative industry, retailers, consumers as well as damaging the US postal service.
George told PG Buzz straight after the hearing: “Sarah and I thought it went well, but we will not know for a few weeks if we had the desired effect: the exclusion of the greeting card industry from the tariffs.”
As previously reported on PG Buzz, the industry is already being affected by the tariffs as they are already in place for giftbags, tissue paper and boxed Christmas cards, but if single greeting cards were included this would affect many more businesses. (https://www.pgbuzz.net/trumps-threat-to-impose-25-tariffs-on-greeting-cards-from-china-are-being-fought-by-us-and-uk-gcas/) As the tariffs are based on the country where the goods are manufactured, any UK publisher or publisher from any other country exporting their giftbags, tissue or Christmas cards that were made in China to the US will be subject to these increased costs.
The hearing gave the opportunity to highlight the key points made in a detailed written testimony George submitted as president of the GCA to US Trade Representative Robert E Lighthizer. This document he stressed that “The proposed duties would place a unique and excessive burden on our affected members, the majority of whom lack the resources and logistical flexibility to absorb the increased costs or locate alternate sources of production”.
Pointing out how the tariffs would hamper innovation, the testimony explained that “Elaborately designed and ornamented cards are highly valued and of growing importance in our marketplace and are largely sourced from hand assembly factories in China. Publishers are not able to economically produce these cards within the United States. Surprisingly, greeting card sales growth in the last five years has come from millennials who are now spending more on greeting cards than baby boomers. Millennials are seeking higher-end, differentiated cards to send to their “card worthy” friends and relatives. These are the very cards mostly now hand-assembled in China, and threatened by these proposed tariffs.’
He also highlighted how it would impact on retailers and the public. ‘Dramatic cost increases to retailers, which would then be passed on to consumers, are difficult in the current economic climate, forcing retailers to make difficult decisions about carrying our products,” wrote George.
Beyond the potential harms specific to the greeting card publishers, due to the role of greeting cards in the broader mailing industry, the testimony made the point that the new tariffs if brought in would also have negative impact on other sectors of the economy. “The industry estimates that more than half of all greeting cards purchased each year are delivered to their intended recipient by the United States Postal Service.
Greeting cards also leverage other types of mail important to the Postal Service. The “mail moment” that drives recipients to their mailbox in the hope of receiving cards or other highly-desired mail is the foundation of their willingness to consider advertisements and promotions. Fewer and less innovative cards resulting from new tariffs would degrade the mail moment and jeopardise the viability of advertising mail pieces raising the prospect of additional volume and revenue losses for the Postal Service.”
Having gone into detail about each strand of the argument against why greeting cards should be excluded, the important document concluded with a strong summary:
“The GCA appreciates the goal of the Administration to restore balance in the trading relationship with China. We urge that the following factors be considered, however:
- Tariffs would pose particular challenges for greeting card publishers, many of whom fall into the category of small and mid-size businesses for whom negative impacts are magnified.
- For those publishers able to withstand the immediate and highly significant, negative impact on profit margins, tariffs would be passed along to consumers in the form of higher prices, as neither publishers nor retailers could afford to absorb them.
- The industry is already strained as a result of the recent and unusually high postage rate increase for our consumers.
- The potential negative consequences to a financially struggling Postal Service and broader mailing industry. For these reasons, we believe greeting cards (4909.00.40) should be excluded from the list of new products subject to tariffs.”
The US GCA has now done all it can. Fingers crossed that the whole industry is spared these additional cost barriers.
Top: The US GCA sent its lengthy testimony to US Trade Representative, Robert E Lighthizer, based in Washington.