If this week has delivered a message, it’s a simple one: Don’t over-celebrate the small victories when a war rages on.
Make no mistake — the toy industry is just one faction in a trade WAR, and the biggest battles are being fought on U.S. soil, with domestic casualties. It’s a civil war (that’s far from civil) under the guise of a global conflict; a self-destructive exercise in wasting time, destroying businesses, and digging holes that will take years to climb out of. And for what? To allegedly “punish” international trading partners by using tariffs to tax American citizens for decisions made by American business leaders and politicians decades ago? As the saying goes, “The men of today will pay for the sins of their fathers.” In this case, the bill is coming due from a White House that doesn’t understand how tariffs work or who actually pays them.
This is not a partisan issue — it’s a common-sense issue in which level-headed individuals can agree that what’s happening in our country is wrong. Still, it’s divisive, and my long-held belief is that in the “politics of play,” the best approach is the Michael Jordan approach. As Mike once said, “Republicans buy sneakers, too.”
To apply that thought to our business, everyone buys toys — Republicans, Democrats, and everyone in between. No matter what side of the aisle you’re on, one thing everyone should agree on is that they want to do right by the kids in their lives. President Donald J. Trump and other members of his Administration are making that increasingly difficult. And no, the White House does not have the right to determine how many dolls or other toys a kid should have. This isn’t the Soviet Union in the 1980s, where food and other consumer products were rationed and distributed to citizens who waited in long lines to receive the spoils of a Communist government. There is overreach happening, and the courts are starting to agree.
On Wednesday, a trio of judges from the U.S. International Court of Trade ruled that President Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) by issuing sweeping tariffs covering imported goods. After a quick appeal, an 11-judge panel granted a stay on the ruling yesterday, meaning that U.S. Customs & Border Patrol officials can continue collecting the IEEPA tariffs, including the global reciprocal tariffs (most set at a baseline of 10%) and the higher tariffs that are in place on imported goods from China, Mexico, and Canada.
Meanwhile, a judge in Washington, D.C., ruled in favor of Learning Resources and hand2mind in their lawsuit, denying a motion by the Trump Administration for a change of venue — to the Court of Trade — while issuing a preliminary injunction on behalf of the plaintiffs. The ruling allows 14 days for the Administration to appeal, and it did. An appeals court also granted a stay in this case.
The bottom line for today: The tariffs are still on.
KEEP FIGHTING & DON’T BACK DOWN
The past few months have seen valiant efforts by The Toy Association, ASTRA, and dozens of other trade associations fighting to keep consumer goods safe and affordable while protecting American jobs. That work continues as the battle to #KeepToysTariffFree rages on. But if things seem a little bit quieter in public forums, it’s likely because of exhaustion and fear.
In the last 10 days or so leading into this year’s excellent Licensing Expo and ABC Kids Expo in Las Vegas — both well-attended, vibrant shows packed with optimism and opportunities — a chilling effect took hold among some previously vocal members of the toy industry.
“I don’t want to be called out in the Oval Office like [Mattel’s] Ynon [Kreiz],” explained one executive, sharing a sentiment quickly echoed by many others from the C-suite on down amid fallout from Trump’s now-infamous “two dolls” comments and the nonsensical ramblings from White House Deputy Chief of Staff Stephen Miller regarding pricing and “lead paint.”
After Walmart’s Doug McMillon said on the retailer’s first quarter earnings call that prices would increase this year, President Trump fired off an angry message stating that the company should “eat the tariffs.”
If going after Mattel didn’t cool things, going after Walmart certainly did for a number of players in the toy industry and beyond. A New York Times article published last week (archived) noted that CEOs and other executives are being mindful of their language, trying to avoid using “t” words like “Trump,” “tariffs,” and “taxes.” This is particularly challenging for those at publicly traded companies, where a tweet can influence a stock price.
While a major company might be able to deal with a 30% tariff on China (despite the pain), the vast majority of U.S.-based toy and game manufacturers absolutely cannot. Good-paying American jobs are not only at risk, but thousands have already been lost. Earlier this month, one company in the collectibles space laid off staff in 16 states. The average consumer may not realize the dire straits facing the toy industry and its retail partners (nor that there is no “make it here” switch to reverse decades of offshore manufacturing), and I don’t believe President Trump, Vice President JD Vance, or the members of their Administration do.
And the factor that might be worse than the tariffs themselves? Uncertainty.
Economic whiplash has made it impossible to accurately plan for the future. This week’s flip-flop is a prime example. Because our Administration maintains an unspoken policy of never admitting fault and course correcting, livelihoods hang in the balance amid name-calling and finger-pointing on a global stage while a tariff tug-of-war plays out in an already overburdened legal system.
As we head into the weekend and ASTRA Marketplace & Academy in San Antonio, I’m sharing a video from Tim Walsh of Seize the Play. It’s directed firmly at President Trump with a message: The Top 10 Reasons to Keep Toys Tariff Free. Keep fighting, my friends. Use your voices, and use them loudly.
For the latest on the evolving tariff situation, click here.
