DON'T TAX TOYS

Will the long-threatened tariffs on toys actually go into effect this Sunday, Dec. 15?

It’s a question that the industry has been asking for months, and as the dreaded date looms, we’re still not entirely clear on if the tariffs will go into effect or not. At press time, reports are swirling that the U.S. and China are nearing an agreement that will delay the potentially devastating 15% duty on more than $160 billion of goods imported to the U.S. from China as part of List 4B. The news prompted a response from The Toy Association, which remains frustrated by the constant flux of the situation.

“The government needs to stop using real people, real companies, and American jobs — 700,000 of them — as pawns in the ongoing trade war with China,” says Steve Pasierb, president and CEO of The Toy Association. “Tariffs were initially intended to be a temporary tool for leverage in U.S.-China trade negotiations. In practice, they will amount to nothing more than a tax on American families and their children and cause irreparable harm to companies of all sizes, especially small businesses, as they are forced to make long-term decisions in an unpredictable business environment.”

As the tariff deadlines have continued to shift, many companies have already absorbed considerable financial impact despite the actual tax not yet going into effect. Costs of canceling and rewriting orders, adjusting shipping times and methods, and increased transport and storage have had a negative impact on the financials of Hasbro and Spin Master and were cited in the recent Chapter 11 bankruptcy filing of Imperial Toy.

In June, Adventure Media and Events LLC — parent company of the Toy Book — joined The Toy Association, along with toy industry colleagues including Aeromax Industries, Bachmann Trains, Basic Fun!, Beverly Hills Teddy Bear Co.,  Hape International, Learning Resources, Loog Guitars, Odyssey Toys, PlayMonster, Rubie’s Costume Co., Thames & Kosmos, the Learning Journey, TOMY International, Trek Bicycle Corp, VTech Toys, and Wicked Cool Toys, alongside retailers, such as Five Below, Go! Retail Group, JCPenney, Joann Stores, Macy’s, Target, and Walmart, as part of a larger group of more than 600 companies and trade associations that delivered a letter to the White House with a clear message: Tariffs hurt the heartland.

“We will continue to advocate with the administration for solutions that can address the very real trade, intellectual property, and business issues our nation has with China while not placing the burden upon America’s small businesses, retailers, and children.  Toys are a source of childhood joy — not a tool in a trade war,” Pasierb says.

Even without a definitive answer on what Sunday will hold, some companies have already begun using tariff pricing on new products scheduled to ship next year. One category of note is action figures, with both Hasbro and Super7 adjusting list prices on their collectors’ ranges going forward.

As always, information regarding tariffs on toys and games is very fluid, and the Toy Book will continue to monitor new developments with updates published here. Additional resources can be found at donttaxtoys.com and tariffshurt.com.

About the author

James Zahn

James Zahn

James Zahn, AKA The Rock Father, is Editor-in-Chief of The Toy Book, a Senior Editor at The Toy Insider and The Pop Insider, and Editor of The Toy Report, The Toy Book‘s weekly industry newsletter. As a pop culture and toy industry expert, Zahn has appeared as a panelist and guest at events including Comic-Con International: San Diego (SDCC) Wizard World Chicago, and the ASTRA Marketplace & Academy. Zahn has more than 30 years of experience in the entertainment, retail, and publishing industries, and is frequently called upon to offer expert commentary for publications such as Forbes, Marketwatch, the Wall Street Journal, the New York Times, USA Today, Reuters, the Washington Post, and more. James has appeared on History Channel’s Modern Marvels, was interviewed by Larry King and Anderson Cooper, and has been seen on Yahoo! Finance, CNN, CNBC, FOX Business, NBC, ABC, CBS, WGN, The CW, and more. Zahn joined the Adventure Media & Events family in 2016, initially serving as a member of the Parent Advisory Board after penning articles for the Netflix Stream Team, Fandango Family, PBS KIDS, Sprout Parents (now Universal Kids), PopSugar, and Chicago Parent. He eventually joined the company full time as a Senior Editor and moved up the ranks to Deputy Editor and Editor-in-Chief.

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