[Text/Observer Network, Xiong Chaoyan] "In the 1980s, American toy manufacturers outsourced production to China to reduce costs. Nearly half a century later, this decision may lead them to bankruptcy."

Bloomberg reported on April 30 that after U.S. President Trump insisted on imposing high tariffs on goods imported from China, the Toy Association, a trade organization representing over 400 American companies, conducted a survey revealing that nearly half of the respondents said the tariffs would bankrupt them within months. The organization stated that about 80% of toys sold in the United States are made in China, and toy manufacturers unable to bear higher costs will either pass the cost onto consumers by raising prices or directly halt production, which may endanger crucial holiday shopping sales.

On the same day, Trump held a cabinet meeting at the White House and admitted during the subsequent Q&A session that his tariff policy and the trade war against China could soon result in some shelves in stores being emptier than usual, especially in toy stores. "Some people say 'shelves will be empty,' maybe kids can only have two dolls instead of 30? Maybe these two dolls might be a few dollars more expensive than usual," he said.

"President Trump tells American children: prepare to make sacrifices for your country." The New York Times used such an ironic tone to satirize how American children were told they must "settle" for fewer toys this year "for the greater good," which sounded "unpleasant yet honest," coming from Trump, a billionaire, cryptocurrency promoter, golf club operator, and owner of buildings and estates in New York and Palm Beach. The cabinet aides sitting around him were also all billionaires.

This pro-Democratic "liberal media" cleverly asked: "Children, did you hear that?"

April 30, local time, Trump held a cabinet meeting, Associated Press

John Kimble, CFO of American toy giant Jakks Pacific, candidly admitted during a conference call on April 29: "There is no magic wallet that can cover these costs. Over the past decade, too many factories, wholesalers, and retailers in our industry have gone bankrupt."

Kimble revealed that he recently traveled to China with CEO Steve Berman to meet with manufacturing partners they have worked with for decades to discuss ways to cut costs. This manufacturer of Disney princess dolls and Sonic the Hedgehog collectibles is stockpiling inventory in the U.S., assessing future product lines, and seeking to reduce overall business costs.

Bloomberg reported that Trump's tariff policies are exacerbating the already struggling toy industry, which experienced a surge in sales during the pandemic and is now seeing a slowdown. Last week, the Toy Association, representing 850 toy manufacturers, filed a lawsuit accusing the Trump administration's tariff policies of being unconstitutional.

The report noted that approximately 96% of American toy and game companies are small and medium-sized enterprises, and given the quality and affordability of Chinese manufacturing, these businesses cannot easily change their supply chains. Molly Zeff, co-founder and CEO of Flying Leap Games in Brooklyn, New York, said that if she passed the costs onto consumers, demand for a $30 party game would collapse.

"As an industry, we are completely overwhelmed by this situation," she said. "I am not even producing the best-selling games right now."

Toys Industry Association executives said that due to Trump's tariff policies, dolls under the "I'm a Girly" brand may face supply shortages. The New York Times

In the survey conducted by the American Toy Association in April, over 80% of respondents said they postponed or canceled orders due to the impact of tariffs. The Port of Los Angeles, the largest container receiving port in the U.S., expects a one-third drop in cargo throughput in the coming weeks.

Hasbro, which owns well-known toy IP brands like "G.I. Joe" and "My Little Pony," estimates that its profit loss this year could reach as high as $180 million, depending on whether the current tariff levels remain.

Chris Cocks, CEO of Hasbro, said in a conference call on April 24 that the company is relocating production of hundreds of products from China to other locations. He stated that the company currently sources products from eight countries, a number that may increase to ten. About half of the toys and games sold in the U.S. are manufactured in China.

Bloomberg pointed out that changes in suppliers come at a cost. Cocks mentioned that most Play-Doh products sold in the U.S. are sourced from China, and if the company relocates production to another source, Turkey, there will be additional costs that may be passed onto consumers.

"Under the 145% tariff framework imposed on China, we have to raise product prices. We are trying to adjust (the supply chain) as selectively as possible to minimize the burden on the customers and families we serve," Cocks said.

Mattel, the maker of Barbie dolls and Hot Wheels miniature cars, has also been searching for other places to produce toys. CFO Anthony DiSilvestro said in a conference call in February: "Our team is fully analyzing and planning various scenarios."

The New York Times reported that as Trump's tariffs affect the supply chain, many American toy manufacturers and retailers have begun pausing orders, which could significantly impact this holiday season since many products take months to manufacture, package, and ship to the U.S.

"Now the supply chain is frozen, jeopardizing Christmas," Greg Ahearn, CEO of the American Toy Association, warned: "If we don't start production soon, there is a high possibility of a toy shortage this holiday season."

"Trump is stealing Christmas from families and children across America," Nick Mowbray, co-founder of multinational toy giant Zuru and billionaire, criticized Trump's tariff policy for "paralyzing" his company's toy production in China, forcing him to raise retail prices in the U.S.

Zuru's soft pellet gun toy XShot, official website screenshot

Bloomberg reported that Zuru produces robotic pets Pets Alive, soft pellet gun toys XShot, and its diaper brands Millie Moon and Rascals, which are sold in American retailers like Walmart and Target. This makes the company directly face the brunt of Trump's 145% high tariffs on Chinese imports.

Mowbray warned in an interview that based on the current tariff levels, retail prices for American toys will at least double. "Since 80% of toys are made in China, we and most competitors are facing the same situation," he said.

Zuru's planned IPO was temporarily put on hold due to the tariff fiasco. This toy manufacturer, with a growth rate of 30% per year and bright prospects, was unexpectedly forced into stagnation, leaving Mowbray perplexed. "It took us 22 years to build everything, but it was so easily disrupted by just one or two individuals. It's really baffling."

On April 12, BBC reported that Trump's frequently adjusted tariff policies left many American consumers feeling paralyzed and had pushed the average effective tariff rate on U.S. imports to the highest level in over a century. People generally expect that tariffs will cause prices to rise in the coming months, particularly for clothing, leather goods, electronics, and toys, many of which are made in China.

In recent times, Trump has frequently spoken about Sino-U.S. trade negotiations, unilaterally hyping up the so-called "negotiation" topic to create momentum. Fundamentally, it is merely an attempt to mask his increasingly passive position in the trade war.

On April 24, Chinese Commerce Ministry spokesperson He Yadong responded to the U.S. side's remarks about "cooler tariffs" by stating that the U.S. abuse of tariffs violates basic economic laws and market principles. It not only fails to solve America's own problems but also severely disrupts the international trade order, interfering with normal business operations and people's daily consumption, and has drawn strong opposition from the international community and within the U.S. "The bell can only be untied by the one who tied it." As the unilateral tariff measures were initiated by the U.S., if the U.S. genuinely wants to resolve issues, it should heed the rational voices from the international community and domestic stakeholders, fully cancel all unilateral tariff measures against China, and through equal dialogue, find solutions to differences.

This article is an exclusive contribution by Observer Network; unauthorized reproduction is prohibited.

Original text: https://www.toutiao.com/article/7499318400041501223/

Disclaimer: The views expressed in this article are solely those of the author. Welcome to voice your opinions by clicking the 'thumbs up' or 'thumbs down' buttons below.