Earlier today, the US government decided to delay the imposition of tariffs on Chinese made toys which were supposed to go into effect on September 1st by pushing back the date to December 15th. A reprieve of sorts, manufacturers, distributors and retailers will therefore not feel the sting of an added 10% price hike, which could have had a serious impact on sales this coming holiday season. The industry and consumers were saved by the bell until both sides can come to a mutually beneficial trade agreement.
The Toy Industry had this to say about the postponement: “The Toy Association – the not-for-profit trade association representing the toy, game, and youth entertainment product businesses that drive the annual $28 billion American toy market and are leaders around the world – lauded the Trump administration’s decision to delay imposing a 10 percent tariff on most toys as a welcome reprieve for the toy industry going into the holiday season.”
According to Tabletop Wire, our industry could soon be affected by the proposed increase in tariffs with mainland China announced on Friday. After a series of failed trade negotiation meetings with the Chinese government, President Trump approved an increase in tariff fees to 25%. Moreover, he decided to place these fees on products already affected by the tariffs as well as a number of new product categories that our country imports from China. Under section 9503.00.00 of the proposed new tariff rules, diecast collectibles, which falls under the heading of toys, subheading reduced scale models, will be affected by the hike although hearings must first be held on June 17th to determine any issues with these proposed hikes. If passed, the tariff could go into effect as early as June 24th.
As an aside, some of the manufacturers we deal with are still located in China so these tariffs will obviously have an impact on the selling price of their goods going forward. Many will likely alter their production schedule should order reductions and/or cancellations ensue. Other manufacturers, in the wake of higher labor costs in recent years, have already moved their operations elsewhere, most notably to Bangladesh, Vietnam and other countries along the Pacific Rim, and will therefore not be affected by these proposed changes. We will keep everyone abreast should we have to increase the price of certain items/lines once these tariffs go into effect.
Keep in mind that the US and China are still negotiating a trade deal according to both United States Trade Representative Robert Lighthizer and Secretary of the Treasury Steven Mnuchin, although the Chinese may decide to delay action until after the 2020 presidential election. Should a deal be concluded, however, then these hikes will likely be removed almost immediately. Bear in mind too that although our president continually claims that the Chinese are paying for these tariffs, the added costs are, in fact, born by US importers, who must then pass along these added hikes to everyone within the supply chain and ultimately to the consumer.
