Tariffs and China Dependency Put America’s Toy Industry at Risk

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Just this week, The Toy Association president Greg Ahearn said on CNN:

Currently, no toys are made in China, and some significant American retailers have been cancelling their orders as a result. This could potentially mean trouble for Christmas celebrations this year, Jake.

Greg Ahearn elaborated on the timeframe required for American factories to match the pace set by Chinese sweatshops.

Building up the necessary capacity and specialized skills could take between three to five years. Notably, about 80% of the toys produced in China are handcrafted.

State of the Industry:

Lately, Clownfish TV has highlighted a significant issue: the shares of American toy giants Hasbro and Mattel, which heavily depend on Chinese-made goods, have been rapidly declining.

Here is how these stocks have performed in the past month:

As a movie reviewer, I must confess that the economic landscape, much like the plot of some films, has taken an unexpected turn. Since President Trump announced his Liberation Day tariffs, the stock market has been teetering precariously, leaving many investors on the edge of their seats. However, in this suspenseful tale, there’s a twist: the 90-day pause he instituted doesn’t apply to China.

This development has left toy companies, who heavily rely on goods from China, at a crossroads. They now find themselves confronting a difficult decision, as highlighted by YouTuber WCBS. The question is, will they ride out the storm, hoping for a change in the script, or will they make a bold move to alter their production strategies? Only time will tell if this twist proves to be a climactic turning point or a plot hole that derails the story.

In the list I previously compiled, known as my comprehensive guide for Transformers toys, Big Bad Toy Store – a company I referenced – has shared with its customers an email detailing the impact of tariffs on their operations.

Here is a portion of their email:

“Tariffs – What Just Happened

Over the past 25 years, our business has thrived as a family-run entity, enjoying a zero percent tariff. However, within the last few months, a 10% tariff was imposed on goods manufactured in China, which subsequently doubled to 20%. In April, a 34% tariff was tacked on, resulting in a combined total of 54%. Last night saw another 50% added, and today (April 9th), an additional 21% was applied, making the current total tariffs on Chinese goods a staggering 125%. Interestingly, Vietnam, which accounts for 90% of our product sales, initially faced a 46% tariff, but it seems this has been scaled down to 10% over the next 90 days.

“What is the Impact

Regrettably, these tariffs will lead to price hikes on the affected products, both new ones and pre-orders that are open for business. We’re actively trying to reduce these costs by negotiating with our suppliers, streamlining import procedures, and shouldering some of the financial burden ourselves. I deeply apologize for this unfortunate situation; I find the tariffs illogical, poorly planned, hastily executed, and detrimental to everyone in the affected countries and across various levels of our industry.

“Who Pays Tariffs

Tariffs essentially amount to a hidden cost borne by American consumers. The foreign governments do not shoulder these costs; instead, it is the US importers who are required to pay them. This additional expense eventually trickles down to you, the consumer, in the form of increased product prices. We deeply regret that this situation has arisen and will strive tirelessly to mitigate its effects on you.

As a movie buff, I find it intriguing to ponder over the predicament many companies I’ve written about appear to be grappling with: whether to shoulder the cost themselves or pass it along to their loyal patrons.

Can the Toy Industry survive?

This is a difficult question that I am unqualified to answer.

The toy industry appears to prioritize financial gain over ethical considerations by collaborating extensively with the Chinese Communist Party, a decision that has potential ramifications. As stated by Greg Ahearn, president of the Toy Association, if the trade war persists, there could be a scarcity of toys for Christmas, implying parents may not have gifts to share with their children. However, I find myself at odds with this viewpoint.

The toy industry is working closely with the Chinese Communist Party in pursuit of higher profits, which might lead to problems if the trade war continues, potentially leaving kids without Christmas toys. But I see things differently.

Stores such as Ross and Ollie are overflowing with unwanted Chinese-manufactured trinkets that could easily last until next Christmas. Why not let children enjoy their current toys instead of always needing something new to play with?

For the past 25 years, I’ve proudly been a loyal customer of Big Bad Toy Store. It’s no secret that certain Chinese-made toys can rival even the best in terms of quality.

It’s high time for the toy industry to adapt, and they should have begun doing so a decade ago. Relying solely on China was never sustainable. If not due to the ongoing trade war, it would have eventually been disrupted by a real conflict when the Communists chose to annex Taiwan by force. Regardless of the specific timing, this alliance was bound to dissolve.

If it’s expected that American manufacturing might need five years to reach optimal speed, it would be prudent to start the process right away. As Eric July from the Rippaverse has outlined, businesses encounter numerous challenges when attempting to relocate toy production within the United States.

As a film enthusiast, I’m finding Eric’s terms challenging, yet I remain hopeful. If we, as Americans, unite our resources and efforts, I firmly believe we can revive toy manufacturing ahead of the gloomy predictions suggesting a wait of three to five years. These forecasts are based on the assumption that not every toy manufacturer will be in agreement. However, if we manage to align our strategies, it would become impractical for some companies to persist in business with Communists, thereby reducing costs significantly.

Due to the tariffs, American toy manufacturers are now considering options other than paying adversaries for their goods. One possible solution could be temporarily shifting production to other nations such as Vietnam or India while enhancing domestic manufacturing. However, this approach would address only a portion of the issue.

To effectively revive domestic manufacturing, the government should consider easing restrictions that hinder these initiatives as Eric suggests. It’s not only profits that pushed toy manufacturers abroad initially; excessive government intervention and control were significant factors too. As John Galt famously stated to the government officials in Atlas Shrugged, “Step aside and let us work!

I’m hoping that the current government might successfully revive toy production within the U.S., even dismantling the rules that previously hindered American toy companies.

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2025-04-18 23:15