Trump’s trade war on Chinese goods could hit the toy industry hard

This holiday season, parents might want to throw a few extra toys in their carts.

The recently announced US tariffs on Chinese products are causing problems for the toy industry – and buyers. The industry could be prepared for the coming winter as products are mostly finished and prices are set, but next year could be more expensive for manufacturers, retailers and consumers, MarketWatch told MarketWatch experts from the toy industry.

Individual toys are not on the list of products affected by the tariffs announced by President Trump on Monday, but some raw materials and chemicals are, including lithium batteries and the chemicals that make Silly Putty. As a result, toy prices for the upcoming holiday season will be higher, said Jackie Breyer, editor of Toy Insider, a toy review site.

“The good news for this holiday season is that manufacturers have the parts they need to finalize any product – 2019 is a whole different story,” she said.

See:Where to buy your toys now that Toys ‘R’ Us is gone

On September 24, $ 200 billion in Chinese imports will be subject to a 10% tariff, and on January 1, 2019, the rate will drop to 25%. President Donald Trump has said he will issue a third round of tariffs, which would affect $ 267 billion in additional imports, if China “retaliates against our farmers or other industries,” according to one White House press release. declaration. The threats are the latest development in an escalating trade war between the United States and China.

Another round of tariffs would likely include finished toys, said Richard Gottlieb, CEO of Global Toy Experts, a consultancy firm for the toy industry.

Other items sold in children’s stores, including furniture and bicycles, are already on the list, said Rebecca Mond, vice president of federal government affairs at the Toy Association. “Overall, these actions have been very bad for the toy industry,” she said. And even if prices are set for this holiday season, higher costs could be passed on to consumers, Mond added. “It will depend on the company and how it can absorb these costs,” she said. “We are playing the waiting game.”

High chairs, booster seats, loungers, baby walkers, cribs and play areas were on an earlier list of items affected by tariffs, but most of these items were exempt from duty. tariffs after manufacturers lobbied the U.S. trade representative. “With China supplying the vast majority of these juvenile products and with no alternative manufacturing capacity readily available elsewhere, tariffs on these juvenile products will result in higher prices and less choice for US consumers,” wrote Corinne Murat, Director of Government Affairs at toy manufacturer Mattel MAT,
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in a public letter to the Office of the United States Trade Representative (USTR) in late August.

Horizon Group, a company that manufactures “It’s So Me” and “Braid-tastic!” said the tariffs would affect their products as well. “These items eg sand and wooden sticks represent some of the most basic and essential items related to everyday craftsmanship, they are an absolutely non-critical area when it comes to workmanship and intellectual property and relevance. for national security concerns, and respectfully they have absolutely no place on the proposed tariff list, ”Horizon Group lawyers wrote in a public letter to USTR.

Also see: This toy was just pulled from shelves for leaking children’s voice recordings

Most of the toys are made in China, and if they aren’t, their parts are, Breyer said. China offers cheap labor and low production costs, and security is not as much of a concern as in other countries, such as Vietnam, Thailand or India, she said. stated, which makes business cheaper there. Imposing tariffs will not encourage US manufacturers to make more toys in the United States, due to rising production costs and material prices, Mond added. “The cost of production here in the United States is always higher than the costs in China with these tariffs,” she said.

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