In April this year, Jay Forman, the CEO of Basic Fun, a toy manufacturer in Florida, USA, found himself in an unprecedented business predicament. Every day, he had to spend a lot of time dealing with one issue: the "reciprocal tariff" policy implemented by the Trump administration led to a sharp increase in import costs. "Employees are anxious and I am under tremendous pressure," Forman candidly admitted on April 17 when interviewed by the Beijing News. As a company where 90% of its products come from China, Basic Fun is facing industry-wide challenges — according to the Toy Association of America, nearly 80% of toys in the U.S. market are produced in China. This tariff storm began on April 2 when the Trump administration signed an executive order imposing a "reciprocal tariff," applying a minimum baseline tariff of 10% to global trading partners, and levying higher tariffs on some trading partners. The U.S. tariff rate on Chinese goods has risen above 100%, prompting strong countermeasures from China. Although some trading partners have been granted a 90-day deferral period, for companies like Basic Fun, the survival test is already imminent. Product orders "on hold" For enterprises, high tariffs mean a sharp increase in import costs. Forman's company, Basic Fun, specializes in designing and marketing classic toys. "The 10% tariff imposed by the U.S. on Chinese goods has forced us to share costs with our Chinese manufacturers to maintain stable retail prices. However, as the tariff rate rose to 20%, profit margins were squeezed, forcing us to renegotiate cost-sharing schemes and slightly raise prices." However, with the Trump administration further increasing tariffs after being countered by China, raising them above 100%, there is no longer any profit margin for Chinese-made toys. "The profit margins in the toy industry are extremely limited. Such high tariffs far exceed the industry's capacity to bear them," Forman stated. "If we insist on importing, all costs will ultimately be passed on to American consumers, but that is clearly not feasible." Forman used an example of a classic toy truck to illustrate the calculation: if calculated at a 145% tariff rate, the retail price would have to be adjusted from $29.99 to $79.99, which is unlikely to be accepted by American consumers. He helplessly stated, "Every arriving container now means new losses, so we have no choice but to suspend operations on certain product lines." Forman revealed, "Currently, we have voluntarily suspended shipments from China. Most of our Chinese clients have paused orders for products with tariffs exceeding 20%, waiting for the tariff situation to become clearer." During this waiting period, he sometimes needs to relieve stress by watching sports events. According to Forman's understanding, the current high tariff policies are threatening the survival of small and medium-sized toy companies in the U.S.: "The vast majority of small toy companies in our industry operate domestically, relying on imported goods from China. If these high tariffs persist for a long time, they may go bankrupt soon." This dilemma in the toy industry is not isolated; more and more American businesses are expressing their anxiety and dissatisfaction through social media platforms. Beth Bernick, a baby product supplier, said her products are imported from China, but due to the new tariff policy causing taxes to skyrocket, her company will soon face a stock-out crisis. Bernick stated that for many local small businesses, the "tariff increase" policy brings not just temporary pain but rather "death." Similarly affected are Chinese foreign trade enterprises. DeShi Group, a footwear technology company in Wenzhou, has been doing foreign trade for 32 years. General Manager Zhang Wenjie told the Beijing News, "Initially, when tariffs increased by 10%, we could both discuss and solve the problem together. But when it reached 34%, such tariffs became unsustainable for industries with slim profits like footwear, so at that time, American orders had already stopped." Zhang Wenjie frankly admitted that 32% of DeShi's export business was directed towards the U.S., and since the repeated escalation of the tariff hike policy, DeShi has suspended most of its exports to the U.S. "Some American clients are willing to increase prices by 30% or consider transshipment trade, but the 90-day production cycle for shoes and policy uncertainty make these solutions difficult to implement. American clients are also anxious because empty shelves will severely impact their brand image." In response to the tariff storm, American companies are maintaining cooperation with China. Forman, who has been in the toy industry for nearly 40 years, has always maintained cooperative relationships with Chinese suppliers or manufacturing partners. During a video call with Beijing News, Forman still discussed the process of his connection with China using the classic truck toy as an example. "Toys like this were originally manufactured in American factories, later moved north to south, then across the ocean, and finally entrusted to Chinese production." Forman particularly mentioned that in 2009, when he founded Basic Fun, thanks to the support of Chinese suppliers, the company was able to get off the ground smoothly. Now, he has dozens of suppliers he has worked with for many years in China. Facing the current tariff challenge, Forman stated that this is not the first time they have encountered policy adjustments. We got through the tariff issues during Trump's first presidential term, and hope to do so again this year. When discussing specific coping plans, Forman said: "We will continue to produce toys in China and sell them to over 60 countries worldwide. In the long run, what we need to do is continuously expand global business and build a more comprehensive distribution network, rather than limit ourselves to toy exchanges between China and the U.S." On April 9, 2025, Los Angeles, USA, shelves stocked with toys imported from China. Photo/IC Photo Forman candidly admitted that he had once explored production bases in other countries, but ultimately chose China because of the innovative and dedicated entrepreneurs, government technological and policy support, well-trained industrial workers and management teams... China not only provides high-quality and reasonably priced products but also has minimal bureaucratic procedures. "I believe there is no place in the world better suited to produce most of the world's toys." Forman told reporters that the most urgent thing at present is to hope that the high tariff issue can be resolved as soon as possible. After all, this is a significant burden for both businesses and consumers. There are quite a few American companies that have made similar choices. According to reports by Guancha Zazhi.com, Luther, founder of MOSO Pillow, a U.S. bamboo fiber bedding manufacturer, said, "Now, staying in China and keeping operations running here is everyone's common strategy." Recently, Luther attended an American entrepreneur conference. He revealed that like other participants, he hasn't spent time seeking new partners or considering transferring business from China. Instead, he is continuing to work with Chinese partners to find ways to cut costs or develop new products. As for some Chinese foreign trade enterprises, they are also looking for ways to cope. Zhang Wenjie introduced that after DeShi Group communicated with American clients about suspending orders, they quickly adjusted their global layout, utilizing overseas branches in Dubai and Russia to open up markets in the Middle East and Europe, and also have business lines in Australia and South Africa. Recently, orders from other countries have been gradually increasing. However, no matter how it happens, the increase in tariffs leads to higher commodity prices, which ultimately customers have to pay for. From the other side of the screen, Forman sighed, "Customers will have to pay more for goods." Forman said that facing the current severe tariff situation, the American Toy Association is fully engaging in government lobbying efforts, calling for tariff exemptions on toy products. Trump's goal of manufacturing return may be hard to achieve Trump once stated that his tariff policy would help bring manufacturing back to the U.S., but many pointed out that achieving this goal is extremely difficult. In the toy manufacturing sector, Forman believes that only a few specific types of toys have the possibility of localization, mainly those injection-molded toys, such as large plastic houses and playground facilities produced by some companies. However, for the vast majority of toy products, the return of the manufacturing industry faces dual challenges. First, the high living costs and labor costs in the U.S. Second, there are not enough available manufacturing workers in the U.S. Cyrus Janson, CEO of Fast Forward Marketing, a U.S. social media consulting company, pointed out that it is very difficult for Trump to bring a large number of manufacturing jobs back to the U.S. According to his observations, the U.S. has spent decades building supply chains with China, and Chinese-made goods have entered thousands of households in America. Even non-Chinese goods heavily rely on Chinese components. "American companies produce in China, thus providing American consumers with quality and affordable goods, allowing millions of Americans to live better lives," Janson stated. "But Trump did not realize this point, and now the entire situation is a disaster for the U.S. economy and Americans." On April 12, 2025, Baltimore Harbor, USA, piles of containers. Photo/IC Photo Xu Qiyuan, deputy director of the Institute of World Economy and Politics at the Chinese Academy of Social Sciences, believed that there are at least two major obstacles to U.S. manufacturing returning: on one hand, multinational corporate investments are substantial and may take years to recoup, but the uncertainty of U.S. policies makes multinationals hesitant; on the other hand, the U.S. lacks industrial workers and production support networks. The current unemployment rate in the U.S. is 4.2%, which is basically at full employment levels in the long term. Meanwhile, the current administration is driving away immigrants. One can imagine that even if capital comes in to invest, there will be a lack of labor force. Liu Ying, a researcher at the Chongyang Institute of Finance at Renmin University of China, told the Beijing News that Trump also hoped to "collect money" through tariffs to balance the U.S.'s massive trade deficits with multiple countries and compensate for over $36 trillion in U.S. federal government debt. Additionally, Trump tried to reshape a trade system centered around the U.S. "The outcome may contradict his goals," Liu Ying said. During Trump's first term, tariffs were imposed, but contrary to expectations, trade volumes between China and the U.S. increased. Trump's attempt to reshape the global trade system was not aimed at achieving multilateral win-win through reducing tariff barriers but rather establishing a trade system centered around the U.S., which is inconsistent with the existing multilateral trade system and international trade rules, making it unrealistic to achieve. Reporter Zhu Yuhong of the Beijing News Editor Hu Jie, proofreader Liu Jun Original article: https://www.toutiao.com/article/7495223399833960970/ Disclaimer: This article solely represents the author's personal views. Welcome to express your attitude by clicking the "Like/Dislike" button below.