Bbc
Jay Forman says he does not have the fat margins of a company like Apple’s to absorb the prices
The activity of the North American toys fair, an annual showcase of the last people of silly owners, monster trucks and board games, is fun. But this year at the New York Convention Center, prices killed the atmosphere.
In February, US President Donald Trump increased prices on products made in China by 10%. Then last week, with little warning, he announced an additional border tax, which now entered into force on Tuesday, as well as prices on Mexico and Canada.
In the toy industry, which estimates that around 80% of toys sold in the United States are made in China, fast announcements have amazed businesses, letting them rush to understand how to swallow a sudden increase of 20% of the cost.
The movements are the first of what Trump has threatened will be a much wider action, which makes an overview of the upheavals that could come for companies around the world.
“This is the first thing we are talking about and the last thing we are talking about,” Toyaker Jay Foreman said this stand at the Commercial Salon this weekend, where classic successes such as Lincoln Logs, Tonka Trucks and K’nex were exposed.
His company, Basic Fun!, 90% of its products in China and had planned to counter the cost of the initial price of 10% with a higher price mixture for customers and lower profits, both for its business and its manufacturing partners.
He presented the strategy to his board of directors on Wednesday, before the Toy Show, for tearing it away the next day after Trump’s later announcement.
He will have to assume the price costs for products directed to stores this spring, he said, but now expects to increase the prices of many articles by at least 10% later in the year.
“The reality is that prices will increase the cost of toys for consumers,” he said. “If a customer says:” Then I can’t buy it “, then I can’t sell it, because I can’t produce to lose money.”
Prices are a tax on imports collected by the government on the border and paid by companies that bring the goods.
During Trump’s first term, China was the main target of measures, with more than $ 360 billion in products sent to the United States being struck by measures.
At the time, toys and many other consumer products were spared.
But Trump has now applied rights to all levels, hitting almost 15% of imports in the United States each year.
Its actions have been overshadowed by prices on products manufactured in Mexico and Canada-the two main American trade partners, who have been operating for a long time under a free trade agreement with the United States.
And they are not from the “up to 60%” price that Trump asked on the campaign trail last year.
But with the last blow, companies say that costs become too important to ignore.
The average effective rate of imports on imports from China is now about 34%, with recent shares amounting to an increase of about twice as large as the increase during the first four -year -old Mandate as president, according to estimates by Goldman Sachs.
Yaron Barlev is not optimistic that the toy industry will receive all 20% tariffs
“10% – This is something we can live with in a way. 20% is a different ball game,” said Yaron Barlev, Clixo operations manager, a Brooklyn -based magnetic toy manufacturer who started about five years ago and signed an agreement last year to start selling his toys in Target later in 2025.
With the manufacture in China, now in progress to satisfy this order, his business, which employs 18 people in the United States, expects to bear the costs of border tasks, blurring his profits.
He said he hoped Trump would offer a kind of stay for toys but did not feel particularly optimistic.
“It’s much less predictable now than before, so I really don’t know.”
Trump said his actions will help stimulate manufacturing in the United States, making less profitable to manufacture products abroad.
But toys like Clixo, who had hoped to make its manufacture in the United States, say high costs and a limited manufacturing capacity in the United States make this idea unrealistic.
Meanwhile, a series of weaker economic data has raised fears that uncertainty due to pricing conversation is beginning to cause broader economic paralysis.
Basic Fun!, Which employs around 165 people and achieves around $ 200 million in sales each year, sought to grow. But with the threat of prices that look, Mr. Foreman recently suspended the plans for acquisitions, I do not know how to calculate the value of a company in such a modifiable environment.
“(A price) sounds well -” let’s co -act! “But the training effect is incredible,” said Forman.
Getty images
Prices were a major concern for companies in the North American toys this year
The Toy Association, a group of corporate lobbies, says it is trying to assert the White House and the Congress that toys should be exempt from prices, as they were before, warning that higher prices will not go unnoticed by an audience already turned upside down by the prices in recent years.
President Greg Ahearn said its members are largely small businesses with barely as important beneficiaries as the prices that start.
“We think we have a very strong point to emphasize and we hope they will be open to listening,” he said.
Chinese manufacturer Ada Luo says that it has no idea how suppliers and buyers will face prices of 20%
The toy fair is the renowned event of its organization, drawing businesses from around the world that feed the New York Congress Center with joyful exhibitions of blocks, Babies for high contrast and thorny balls. But you worry about the victims of collection this year.
“This kills our Mojo,” said Ahearn, noting that it was the main concern of its members.
From their stands, toys have welcomed questions about Trump’s movements with head shakes, grimaces and disbelief.
“20%is a lot,” said Ada Luo, Wonderful Party sales director, a manufacturer in Shenzhen, China, who manufactures light Christmas necklaces, New Year’s Leis and hats. “Perhaps 10%… Between the supplier and the buyer we can share, but 20%? We have no idea.”
