A tweet was all it took to put toy tariffs back on the table.
…during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%…
— Donald J. Trump (@realDonaldTrump) August 1, 2019
President Trump announced via his preferred medium that an additional 10% tariff is expected to be placed on the remaining $300 billion of goods imported from China (read: all imported Chinese goods) beginning September 1. This is expected to include finished toys and all other toy-related items not yet subject to tariffs. More specifically, the imposition of these new tariffs with a September 1 start date could hit toymakers that have already placed orders for holiday.
Following the news, the president met with reporters where he said ratcheting tariffs up further, to 25 percent—his original proposal—or more wasn’t yet out of the equation.
“It can be lifted in stages. So we’re starting at 10 percent, and it can be lifted up to well beyond 25 percent,” the President told reporters. “But we’re not looking to do that, necessarily.”
The news has already rocked Wall Street with stocks dropping for many and the CBOE Volatility Index, which gives a real-time reading on the market’s expectation of 30-day forward-looking volatility, hitting its highest reading since June 4. Apple, which is also expected to be impacted, dropped sharply Thursday, down a full 2 percent at one point in the day. Toymakers such as Hasbro and Mattel, which just reported better than expected Q2 results, also felt the impact. Previously, on a Hasbro investor call, CEO Brian Goldner detailed how its U.S. team has already begun preparations for these potential tariffs, predicting a “challenging and damaging impact” on the toy industry if implemented.
According to The Toy Association, the new tariffs are in addition to the $250 billion in goods that already have a tariff of 25 percent, which include some inputs, components, and raw materials for domestic toy production as well as other children’s products such as hats, children’s furniture, and bicycles.
The Toy Association has been aggressively advocating against tariffs for more than a year and, as an active member and leader of the Americans for Free Trade coalition, will continue to spread awareness about the negative impact of tariffs on American companies, jobs, and families. The Association will also maintain its education campaign about the negative impacts of tariffs, including its digital resource, DontTaxToys.com.
“Through thousands of hours of advocacy, hundreds of meetings on Capitol Hill, multiple bipartisan letters from members of Congress to the Administration asking toys be held harmless from tariffs, a DC fly-in of member companies, and continual messaging through all forms of media, The Toy Association has been clear that tariffs hurt the American toy industry and the American families we exist to serve,” said Steve Pasierb, president and CEO of The Toy Association. “Kindly and constructively providing facts, logic, detailed financial explanations, testimony, and first-hand stories from toy company and retail employers here in the United States apparently still cannot prevail over the power of the tweet. We will continue to advocate on behalf of our members, all in the toy, play and retail communities and the side of right.”