Americans may feel a pinch on the hip pocket nerve this Christmas as some toymakers pass higher import tariffs to shoppers
- About 3 billion toys are sold in the US each year at an average price of US$10 per item, with nearly 85 per cent of them made in China
- Threatened tariffs have toymakers ‘upset, confused and scared’, according to US trade group
This year’s Thanksgiving or Christmas shopping season may be a more expensive one for Americans, as toymakers who are struggling to move their manufacturing bases out of China may have to pass some of the costs from higher US tariffs on to customers.
Toymakers from Hong Kong to Rhode Island are already reconsidering their manufacturing base in mainland China and asking their Chinese partners to share the higher costs to cope with US President Donald Trump administration’s threat to slap more tariffs on nearly all goods made in China.
It is a dramatic re-evaluation of a relationship that has spanned decades and spawned a highly specialised industry that accounted for about US$27 billion in US sales last year. It also is a relationship that is proving to be hard to sever.
“[Toymakers] are upset, confused and scared all at once,” said Stephen Pasierb, president and chief executive of The Toy Association, a US trade group. “They’re trying to figure out, if the tariff does happen, how much [of the cost do] they have to eat, how much will the retailer be willing to eat and how much gets passed to the consumer by the retailer.”
Trump has threatened to place 25 per cent tariffs on US$300 billion of Chinese-made products, including toys, later this year unless Beijing agrees to change years of trade and industrial policies that he claims are unfair.