A US-China pledge to slash tariffs on $60 billion worth of goods — including dolls, puzzles and other play items — has the toy industry hoping for a Christmas miracle.
Toys were among 77 categories named as getting tariff relief, the White House announced Sunday. Sellers welcomed the policy change after months of reeling from inflation and affordability woes.
“For American families, toys are price-sensitive purchases,” Kathrin Belliveau, chief policy officer of the Toy Association trade group, wrote in an op-ed last week. “When prices rise, families make difficult choices about what they can afford.”
The tariff agreement came in the wake of Chinese President Xi Jinping’s state visit last week, and could eliminate the current 20% tariff toymakers pay to import products from China. Affected products are yet to be finalized.
With more than 80% of toys sold in the US made in China — even Lincoln Logs, which moved East in July as its Maine factory was shuttered — sellers expect a big impact.
Some toy makers are hoping to benefit from the policy change in time for the holidays – as many shippers are increasingly bringing in goods later in the year because of frequent changes to tariffs, according to Jay Foreman, CEO of Basic Fun.
The industry has also been reeling from higher diesel prices during the Iran war — with some importers adding $600 surcharges per shipping container, according to Foreman, whose company makes Care Bears and Tonka Trucks.
“Diesel is used in factories, by the trucks that pick up goods at the ports and a lot of steam ships still use diesel fuel,” the toy executive added.
“The cost of diesel fuel as well as other inflationary aspects are pushing against our ability to lower costs.”
Still, toy sales rose 17% in the first half of the year compared to a year ago, mostly because adults are buying collectibles.
China and the US set up a board that will agree on lists of imported goods totaling $30 billion on each side.
Each side submitted lists, with China identifying more than 1,600 US imports, including US agricultural goods, medical devices and surgical robots that will get relief.
“The announcement puts products on the table, but it does not take tariffs off the books,” said Sara Albrecht, chief executive of the Liberty Justice Center, which successfully sued the Trump administration on behalf of five small businesses to overturn a big chunk of the president’s tariffs earlier this year.
“Businesses still do not know which duties would change, what the new rates would be, or when any reduction would begin,” she added.
The Toy Association, which advocated for the China tariff cuts, declined to comment as it awaited further details on the new policy.
The White House did not immediately respond to a request for comment on when the China tariff policy will be finalized.
Credit: Source link
