It’s a pre-Christmas miracle: the fourth tranche of tariffs on Chinese goods has been split, with toys off the table until at least Dec. 15.
The Office of the United States Trade Representative (USTR) issued a revised plan for tariffs, splitting the previously-announced list in two — 4A (Sept. 1) and 4B (Dec. 15). Items subject to the new tariffs will be taxed at the 10% rate revealed by President Trump via twitter on Aug. 1. Overall, 4A and 4B comprise more than $300 billion in goods produced in China and imported into the U.S. Earlier this month, widespread concern swept across the toy industry with fears that toys could see increased costs that would be passed onto consumers just as we enter the all-important holiday shopping season. The full list of categories including toys can be seen at the USTR website.
While the current reprieve is appreciated, numerous products are already impacted by the previously-enacted 25% tax on certain raw materials that are used to create finished goods here in the U.S. In addition to tariffs pushed into December, the USTR says that certain products are being removed from the tariff list based on “health, safety, national security, and other factors and will not face additional tariffs of 10%.”
The additional time should allow certain companies to continue making plans for mitigation, possibly by moving production elsewhere.
“A delay in tariffs to Dec. 15 has saved the holiday season for many in the U.S. toy and play community,” says Steve Pasierb, president and CEO of The Toy Association. “We appreciate leaders in the administration listening and we hope through the tariff exclusion process the administration will provide further relief to the toy industry by eliminating all toys and toy-related components from these latest tariff lists. While we continue to support the goal of restructuring the U.S.-China trade relationship, tariffs are the wrong approach.”
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, 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.
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.