It appears that the tariff truce is over.
A month after cooling off and restarting trade talks between the U.S. and China, President Donald J. Trump announced via twitter that the long-threatened next round of tariffs will go into effect beginning Sept. 1. Of course, much can change in a month, so let’s hope that’s the case and we see a reversal on this.
“Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional tariff of 10% on the remaining $300 billion of goods and products coming from China into our Country. This does not include the $250 billion already tariffed at 25%,” the President tweeted amid a multi-tweet run in which he blamed the Chinese government for not following through on a promise to purchase additional U.S. agricultural products.
If there’s a bright side, it’s that the additional tax — and lest we forget, tariffs are taxes — is 10% and not the previously-threatened 25%, and that most holiday products have already been shipped, thus avoiding the higher tax rate. It is expected that the 10% rate will affect all finished toys and games that are imported from China.
“Through thousands of hours of advocacy, hundreds of meetings on Capitol Hill, multiple bipartisan letters from members of Congress to the Administration asking toys be held harmless from tariffs, a DC fly-in of member companies, and continual messaging through all forms of media, The Toy Association has been clear that tariffs hurt the American toy industry and the American families we exist to serve,” says Steve Pasierb, president and CEO of The Toy Association. “Kindly and constructively providing facts, logic, detailed financial explanations, testimony, and first-hand stories from toy company and retail employers here in the United States apparently still cannot prevail over the power of the tweet. We will continue to advocate on behalf of our members, all in the toy, play and retail communities and the side of right.”
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, Hape International, Imperial Toy, 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 message: tariffs hurt the heartland.
The letter was followed by testimony by numerous players in the toy and game space, along with several retail partners, and The Toy Association, at the U.S. Trade Representative’s (USTR) Special 301 Committee hearing in Washington, D.C. just days before the G20 Summit kickoff.
Last week, Hasbro notably spent a considerable amount of time discussing potential tariff impact and consequences during its quarterly earning call — sentiments echoed by Mattel just days later.
While the overall impact and mitigation strategies will vary widely from company to company, almost everyone agrees that any new tariff will lead to increased cost for American consumers, and potentially catastrophic losses for smaller companies.
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.