Still on Edge: US Toy Makers Face Tariff Showdown
US toy makers face uncertainty as Supreme Court weighs $Billions in tariffs. Industry braces for profit hits, price hikes, and possible relief.
Recently, when the toy industry gathered in New York City for its major annual convention, the head of a small company stood out from the crowd, and fellow business owners welcomed him like a minor celebrity.
Rick Woldenberg, chief executive of Learning Resources, made headlines last year when he took the White House to court, challenging Donald Trump's massive global tariffs on imports from countries around the world.
This year, Trump's rapid trade announcements have slowed, so many in the US are hoping to overcome the impact of these levies—which include price increases and reduced profits.
But the influx of people to Woldenberg's booth was a sign of how uncertainty over trade policy is troubling many firms. The Supreme Court could rule on his case as early as Friday.
"People are coming to applaud us for standing up," Woldenberg said, speaking near a display of stuffed animals and building blocks. Trump's bizarre tariff rollout last year shook the business world, with levies on Chinese goods reaching 145% at one point.
Read Also
The toy industry, which relies heavily on China for manufacturing, was particularly affected by the new import taxes, which increased costs for many firms.
Many businesses raised prices to help cover the duties, impacting their profits. Woldenberg even filed a lawsuit against the administration and began a court battle.
However, in some ways, the impact of these measures was not as severe as initially feared, especially for consumers.
Some companies were able to switch suppliers or decided to bear some of the costs.
The White House also exempted some products and rolled back some of the highest tariff rates. For example, the average tariff for Chinese imports has fallen by about 20%.
Harvard Business School professor Alberto Cavallo, who has been tracking the impact of tariffs on consumer prices, said that the prices of inexpensive items have risen more rapidly.
But he also said that while many low-priced toys have become slightly more expensive, his research shows that the tariffs have had "little impact" on overall toy prices.
Software Services
 |
Start your own gaming platform for just $3,000 |
Interviews at Toy Fair revealed that many businesses were hoping to avoid further price increases this year if the tariff policy stabilizes.
Basic Fun Chief Executive Jay Foreman, whose company's profits fell 65% last year, said, "You can't even imagine this president."
The company finally raised the price of its Tonka plastic toy trucks from $30 to about $35 late last year—a price it had hoped to maintain until 2026.
"We're still confused. We'll be confused for at least the next three years."
Last April, sensory toy company Glo Pals raised the price of its best-selling toy—a pack of water-powered light-up cubes—by nearly 20% to $12.99. This was the first increase in six years. The company's founders said they expect no further price increases in the coming year, but warned that tariff rate changes could disrupt this plan. "This is an economic environment that's constantly changing," said Anna Barker, the firm's co-founder. "All this uncertainty is still everywhere for us—we're not in a volatile period yet."
Read Also
The White House has said that if the Supreme Court rules against the current methods, it will explore other ways to impose tariffs.
If the Trump administration loses the tariff case, the government may have to return some of the billions of dollars it has collected from businesses.
Foreman said such a ruling could help the company bring prices back to "normal levels." Woldenberg also said his firm is betting on "further relief from the lawsuit."
"We're trying to get it back as quickly as possible," Woldenberg said.
Others are less hopeful.
Tim Hislop, co-founder of UK toy brand Floss & Rocks, said he isn't betting on a refund of the tariffs his firm has already paid to bring its toys to the US market, which accounts for more than half of his company's revenue.
But a ruling against the move could reduce his expenses and bring him relief. He said with a laugh: "I say a little prayer every night."
Thank you for reading this content.
Thank you for reading this content.
What's Your Reaction?
Like
0
Dislike
0
Love
0
Funny
0
Angry
0
Sad
0
Wow
0
