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Tariffs Won't Bring Toymaking Jobs to the U.S., but They Might Kill Toymaking Jobs Already Here

Tariffs on aluminum, silicone, and dyes are already causing pain for toymakers, and the prospect of additional tariffs is anything but fun and games.

Christinne Muschi/REUTERS/NewscomChristinne Muschi/REUTERS/NewscomAmerican toymakers say the latest round of tariffs aimed at Chinese-made goods will hike prices for consumers and are likely to trigger job losses across the industry. Meanwhile, the tariffs won't achieve their primary goal of bringing manufacturing jobs back to the United States.

"We are not aware of any toy company that has indicated that the tariffs would result in U.S. manufacturing becoming a viable option," Steve Pasierb, president of The Toy Association, an industry group, told the Office of the U.S. Trade Representative in a letter last month. Toy manufacturing is too labor intensive to be cost-effective in the United States, he said. And there isn't sufficient infrastructure or manufacturing capacity in the U.S. either.

Much like cell phones, computers, and other more advanced "toys," most children's toys sold in the United States are not made in any one country but are produced by complex global supply chains that President Donald Trump's tariffs aim to upend. According to the Toy Association, Americans purchase more than $27 billion worth of toys each year—accounting for about a third of global toy sales. While about 85 percent of American-sold toys are manufactured in China, 80 percent of the purchase price of the average toy remains in the United States because toymakers do research, development, design, and testing in America.

So far, toys imported from China have not been targeted by the Trump administration's tariffs. But groups like the Toy Association are worried that the president may follow through with threats to impose more tariffs aimed at Chinese-made goods beyond the $200 billion in imports already subject to new taxes—something Trump has repeatedly threatened to do. Other items commonly made by the same companies that produce toys, including children's furniture, arts and crafts items, and some children's clothing, are already subject to tariffs.

Even without an additional hit from tariffs, the American toy industry is in some trouble. Mattel, one of the biggest American toymakers, recently announced plans to lay off 2,200 workers. That move was tied to the bankruptcy of Toys 'R' Us earlier this year.

If toymakers respond to tariffs by shifting production out of China, it won't be to the United States. And it won't happen quickly.

"There is absolutely no way that Hasbro and Mattel can shift from China to another low-cost country overnight," Lutz Mueller, CEO of the logistics firm Klosters Trading, told CNN on Sunday. "They don't have the infrastructure or supply chain in place."

While tariffs are unlikely to cause major toymakers to shift supply chains in order to manufacture more toys in the United States, they are also causing economic pain for toymakers that are already do make toys here.

"It's going to cost us into the six figures this year in extra costs," Aaron Muderick, CEO of Crazy Aaron's Puttyworld, told CNBC last month. Trump's tariffs on silicone, aluminum, and dyes have increased costs for the suburban Philadelphia putty-maker, which employs about 85 people. Muderick said his company made the decision to disrupt its typical supply chain in order to "stock up" on silicone before anticipated price increases hit after the tariffs took effect. When that supply runs out, he's worried about the blow the company could take.

"We've already locked in prices with retailers for next year with many of our products," he said. "It's going to be very difficult for us, because the margins just keep getting tighter and tighter."

Photo Credit: Christinne Muschi/REUTERS/Newscom

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  • A Thinking Mind||

    We need to stop outsourcing all our toy manufacturing jobs to the North Pole.

  • Agammamon||

    The trade deficit with those people is yuuuge! They're ripping us off!

  • Shirley Knott||

    It's offset by the snow surplus.

  • Agammamon||

    See?! You people love you some protectionism when you're getting all the benefits? We've had snow down here thrice in the last century.

  • sharmota4zeb||

    Yeah, I heard that the factory owner there pays his employees so little that they are stunted from malnutrition. And he practically gives the toys away to Americans. Who can compete with those prices? Do the patriotic thing, and give your kids socks for the December holiday like normal people do.

    ;)

  • Harvard||

    We need to stop talking about Trump's tariffs as though trade was fair and equatable before they were imposed.

  • Homple||

    Good point. Those who benefitted from the government-imposed previous tariff structure are having sadz now that the government has changed the structure.

  • sarcasmic||

    I see lots of people saying that Trump's tariffs are making things worse. Making things worse does not imply that things were perfect before. The only ones making that argument are straw men put forth by Trump supporters.

  • chipper me timbers||

    Pre tariff: Buying my widgets costs X.
    Post tariff: Buying my widgets now costs me X + 30% enforced at gun point.

    Pretty easy to tell which situation is more fair.

  • sarcasmic||

    Pre Trump: Buying your widgets cost X + 3%.

    Post Trump tariff: Buying your widgets costs X + 30%.

    Neither situation is perfectly fair. If you think 3% is better than 30% then you're saying 3% was fair and equitable. But 3% isn't fair and equitable because a tariff exists. Any tariff is a trade war! So you're saying that you like trade wars because you like 3% tariffs! Since you like trade wars, you're a liar to say you don't like 30% tariffs, because both are a trade war!

    Ha!

  • chipper me timbers||

    In this you're correct. All tariffs are unfair and unlibertarian, whether it's 3% or 30% But raising from the hypothetical 3% is increasing the unfairness. Why would anyone support such a thing?

  • sarcasmic||

    Because Trump! Because MAGA! Because tired of winning! Because art of the deal!

  • ||

    And despite all the histrionics from the left, the right, and the libertarians....it seems to be working.

    Sometimes it seems the adage, "Dont believe everything you think" is more on target than anyone realizes.

    We've watched our economy get sapped by....well.....every nation on earth. I'm inclined to give the Trump'sters a shot. Left and right have mucked everything up, what do we have to lose.

  • buybuydandavis||

    Trade policy is foreign policy
    Get over it

  • chipper me timbers||

    Tariffs are central interventions into otherwise free interactions similar to minimum wage, rent controls, etc. It's amazing to me how many fiscal 'conservatives' are gung ho for tariffs.

    And the flip side is even more amazing. All these reason writers who are horrified by the Trump Tariffs but show a soft side for other economic controls frequently. wtf

  • Homple||

    Old tariffs good; Trump tariffs bad.

  • sarcasmic||

    Good point. I mean, anything short of zero tariffs is a total trade war. The fact that pre-Trump tariffs were at an all time low is completely meaningless, because tariffs existed. Free trade means no tariffs at all by anyone. So anyone who complains about Trump raising tariffs is saying that the previous tariffs were good and wonderful. They're idiots who don't understand that free trade means no tariffs at all. To say that tariffs at an all time low was better than high tariffs is just stupid, because any tariff at all is a trade war. There was a trade war. There has always been a trade war. Only by raising tariffs to all time highs, and causing our trading partners to respond with higher and higher tariffs, will Trump end the trade war. Only a tit-for-tat raising of tariffs will bring us no tariffs at all. Because Trump is a genius who knows better than any statesman or economist who ever lived.

    Or something.

  • James Pollock||

    What? Tariffs are simply national defenses against a hostile world that's trying to flood the country with cheap, well-made goods.

  • Ron||

    Kids should be at school or the factory, give them all coal

  • Chipper Morning Baculum||

    < href="http://existentialcomics.com/">This one is for Hank Phillips.

  • Chipper Morning Baculum||

    Oops, Sevoed the link: This one is for Hank Phillips.

  • chipper me timbers||

    Buyer: I'd love to buy 100 cases of your widgets please.
    Seller: Sure thing. I'll ship upon receipt of payment.
    Buyer: here you go.
    TARIFF MAN: NOT SO FAST Buyer!! First you have to pay me an additional 30% of the total transaction cost!
    Buyer: But.. uh.. why?
    TARIFF MAN: For your own good!

  • Shirley Knott||

    Best summary yet.

  • Last of the Shitlords||

    It's actually shit, but I'm just going to let the anarchist idiots have their circle jerk today.

  • Harvard||

    Seller to Canadian: I'd like to contract with you for 100k gallons of milk.
    (before buyer can respond)
    Trudeau: Fuck off, ain't gonna happen.

  • sharmota4zeb||

    This reminds me of buying gas in New Jersey.

  • ||

    Close:
    Buyer: I'd love to give you 1000 dollars for 100 cases of widgets please.
    Seller: Sure thing, I'll ship them upon receipt of payment
    Buyer: Here ya go.
    Tariff man: Not so fast Buyer, You'll have to pay me an additional 30%.
    Buyer: Okay, Seller, can only buy 1000 worth so I'll take 70 cases and the Tariff man gets 300 dollars
    Seller: Okay...that sucks, but okay.
    Seller's suppliers: Sorry, I'll only need 70 cases
    Buyer: As the entirety of the purchase still cost me 1000, The cost per widget will go up by 30%.
    Buyer's Customer: Guess I dont need the widget.
    Buyer: Put widgets on sale, 30% off, get rid of the widgets, dont order them from Seller anymore, Order them from Seller B, there is no tariff on him.
    Seller: Fills out application for a job at starbucks.
    Seller B: gets all the biz.

    It isn't just about attacking your own buyer, thats far too simplistic. It hurts everyone up and down the supply chain and encourages a nation that isn't under a tariff to go into the widget business. Granted this is also simplistic, but far closer.

  • buybuydandavis||

    "Taxes are bad, m'kay?"

    When you get tax free anarchotopia working, let us all know.

  • buybuydandavis||

    BoehmBot generates another cookie cutter "look, tariffs increase cost for business X".

    Duh
    We know
    Tariffs cost money

    4% GDP growth
    Historically low unemployment

    Seems like somebody is making money
    And for a change, some of them are workers

  • TJJ2000||

    The U.S. federal government has been taxing (i.e. STEALING) peoples money for subsidized foreign trade for YEARS!!! So - If Trump decides to shift that TAX COST onto foreign goods (... FOR foreign trade...) he as every constitutional right AND JUSTIFIABLE reasons to do so.

    ** Every persons proof ** How is it that China can ship a package to your door for less than $1 but it takes over $10 to ship that same package to your neighbor next door???

    Granite; Its a lot cleaner and far better route to just REPEAL all the IDIOTIC foreign tax-paid hand-outs but sometimes duct-taping a leaky pipe is the best one person can do at the current moment in time. The USA cannot financially keep taxing its citizens to "improve" foreign economies!!!

    Trump campaigned on making "America First!" -- He, unlike many, is only upholding his campaign promises.

  • moschinoonline||

    According to lc, anything other than zero tariffs on both sides is a trade war. Winning the trade war means getting the other guy to drop all their tariffs. Even if they're down to historic lows, like one or two percent, that's still a full fledged trade war that warrants twenty five percent tariffs in retaliation. Winning is essentially impossible. So the goal is not to win. The goal is protectionism.

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