Business

How Trump’s Tariffs on China Are Affecting Toy Companies

Published

2 months ago

March 3, 2025

How Trump’s Tariffs on China Are Affecting Toy Companies

At the biggest toy industry trade show in the Western Hemisphere this weekend, toy makers, as usual, displayed seemingly endless rows of stuffed animals, action figures and puzzles, hoping to entice retailers to pick their products.

But this year, the chatter at Toy Fair New York was dominated not by the next Barbie, but a larger game, one of global tactics, that could make most toys more expensive for U.S. consumers.

Almost 80 percent of toys sold in the United States are made in China. Last week, just as toy vendors from across the United States and dozens of other countries started to flock to the Jacob K. Javits Convention Center for the annual toy fair, President Trump announced a 10 percent tariff on Chinese goods that would come on top of the 10 percent he already imposed a month ago.

Companies big and small — from family-owned brands to household names — are trying to figure out how to manage the new costs related to tariffs. Stationed at a booth lined with plush stuffed animals, Linda Colson, the vice president of sales at Mary Meyer Corporation, said her company, based in Vermont, was in a state of paralysis over pricing. “We don’t know what to do,” she said. “I think a lot of people in this building are just waiting to see what everybody else is doing.”

Jay Foreman, the chief executive of Basic Fun, a toy manufacturer and distributor in Florida, sells to retailers including Walmart and Target. After Mr. Trump ordered the 10 percent tariff on China in February, Mr. Foreman started thinking of ways to avoid passing those costs onto his customers. So last Wednesday, he met with his company’s board of directors to devise a plan that would split the burden: the company, its factories in China and its retail customers would each absorb 3.5 percent of the added cost.

But just hours later, Mr. Foreman tuned into CNBC and heard Mr. Trump declare that new tariffs on China could jump to a total of 20 percent this week. The company’s plans “went right out the window,” said Mr. Foreman, whose company employs about 110 people in the United States and a total of 165 people globally.

“Now, those can’t be absorbed, and that additional tariff has to be passed onto the consumer,” he added. “It tipped the domino.”

The Tonka Mighty Dump Truck, which Basic Fun makes under a license from Hasbro, currently retails for $29.99. That price will probably increase between $5 and $10 for consumers, Mr. Foreman said.

Some of the bigger companies at the convention expressed confidence that their Chinese suppliers would absorb a portion of the added costs, as factories would not want to lose business.

Safari, which sells animal figurines, produces about 90 percent of its products in China, said Danny Falero, the company’s director of marketing, and manufacturers have said they are willing to make some concessions. He emphasized that his company did not intend to raise prices unless Mr. Trump’s policies went into effect.

“It’s slightly theater, so let’s see what actually lands, and then we’ll make adjustments based on that,” Mr. Falero said.

Looming tariffs were weighing heavily on Luis Prior, who owns Meavia Toys, a small company in Corbin, Ky. His three-year-old business designs sensory toys for children with special needs and are sold to teachers, hospitals and museums.

Mr. Prior said that regardless of whether tariffs on China stayed at 10 percent or doubled on Tuesday, he would have to raise his prices. But the uncertainty has made it impossible to make any specific pricing decisions, he said. When he returns home from the convention this week, Mr. Prior plans to go through his products, item by item, and reassess.

“Exhaustion,” Mr. Prior said. “That’s the only way I can describe it.”

Three billion toys are sold in the United States each year, generating $42 billion in sales and supporting nearly 700,000 jobs, according to the Toy Association, a trade group representing the U.S. toy industry.

The association has been lobbying for an exemption from Mr. Trump’s broad tariffs, pointing in part to the fact that small businesses make up roughly 96 percent of the industry, said Greg Ahearn, the group’s chief executive. During Mr. Trump’s first term in the White House, he had imposed 10 to 25 percent tariffs on many Chinese products — but he backed down from tariffs on toys, among other consumer goods.

While most toys are made in China, some manufacturing has moved to Mexico in recent years, but Mr. Trump also said that the 25 percent tariff he had imposed on Mexico and Canada would go into effect on Tuesday.

The Toy Association has been visiting senators’ offices and pushing to get its message to people inside the Trump administration, Mr. Ahearn said, as well as communicating with its members daily to share the latest updates on tariffs.

Mr. Trump’s announcement of an additional tariff on China coincided with Mr. Ahearn’s preparations for the Toy Fair. “It wasn’t good, and now it’s unbearable for us as an industry,” Mr. Ahearn said, adding that a 20 percent tariff will inevitably be passed onto consumers.

In an interview with CNBC on Monday, the White House trade adviser, Peter Navarro, doubled down on Mr. Trump’s tariff plans, saying their effect on consumer prices would be “second order small” when taking in account the administration’s simultaneous plans to deregulate industry, reduce the size of the federal government and expand energy production.

“I don’t see the president wavering on any of this,” he said.

Five years ago, Sharon Azula and her husband started a company called the Tooth Brigade selling tooth-fairy pillows. Last summer, they lowered the retail price for a pillow — a small stuffed animal with a tooth pouch — to $14, down from $16, which helped boost demand.

Tariffs, especially if they amount to 20 percent, are likely to force Ms. Azula to raise prices again, since everything they sell is manufactured in China. When they started the brand, she and her husband wanted to manufacture their products in the United States, but it was too expensive, she said.

Now, motioning to a pillow at her Toy Fair booth, Ms. Azula said she was worried that higher prices could sink the business.

“When I’m here, I try not to think about it,” she said, tearing up. “But when you try to think about what the future is going to be — I don’t know. I just don’t know.”

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Business

Google settles lawsuit alleging bias against Black employees

Published

22 minutes ago

May 13, 2025

Press Room

Google settles lawsuit alleging bias against Black employees

Google agreed to pay $50 million to settle a lawsuit alleging the search engine giant was racially biased against Black employees.

The settlement, which was reached after mediation and certified by a U.S. District Court judge in Oakland on Friday, covers some 4,000 Google employees in California and New York.

The original lawsuit came after a state agency, now known as the California Civil Rights Department, in 2021 began investigating Google’s treatment of Black female workers.

In 2022, former Google worker April Curley filed a lawsuit in federal court in San Jose alleging that she and other Black workers experienced systemic discrimination.

Curley, who worked at Google for six years, had been hired to conduct outreach and design recruiting programs with historically Black colleges.

However, her experience at the company quickly soured, she said, alleging that she was stereotyped as an “angry” Black woman, that she and other Black women had not been allowed to present during important meetings and that she was wrongfully terminated in 2020 after challenging internal practices.

Black workers were hired to lower-level jobs, paid lower wages, subjected to hostile comments and denied promotions, Curley and other Black workers who joined the proposed class-action alleged in their lawsuit.
The complaint said managers disparaged Black employees for not being “Googley” enough, comments the plaintiffs said served as racist dog whistles.

Throughout the litigation, the Mountain View-based company has maintained that it did not violate any laws.

“We’ve reached an agreement that involves no admission of wrongdoing. We strongly disagree with the allegations that we treated anyone improperly and we remain committed to paying, hiring, and leveling all employees consistently,” Google spokesperson Courtenay Mencini said in a statement Tuesday.

In addition to the monetary payout, Google has agreed in the settlement to analyze pay and correct differences based on race for the next three years. The company has also committed to maintaining transparent salary ranges and methods for employees to report concerns about pay or other practices.

And through August 2026, the company will not require employees to enter into mandatory arbitration for employment-related disputes, according to the settlement agreement filed last week in federal court.

Business

Tariff Misery in Japan: Honda and Nissan Forecast Plunges in Profit

Published

16 hours ago

May 13, 2025

Press Room

Tariff Misery in Japan: Honda and Nissan Forecast Plunges in Profit

President Trump’s decision to negotiate a break for China on tariffs is galling for Japan, which is reeling from auto sector levies that the White House has shown no sign of willingness to lift.

Japan, a top U.S. ally in Asia, was eager to advance trade negotiations with Washington, even as Mr. Trump imposed tariffs on automobiles, and threatened an across-the-board 24 percent tariff on Japanese goods.

While Beijing and others assembled plans for retaliatory tariffs, Japan rushed to Washington for trade negotiations, armed instead with commitments to buy more American goods and boost investments in the United States to $1 trillion.

Now in Tokyo, the sting is palpable.

On Tuesday — one day after the Trump administration agreed to temporarily nix most of its tariffs on China — two of Japan’s top automakers issued dire profit forecasts, weighed down by the effects of U.S. car tariffs.

Honda Motor said that its operating profit would fall nearly 60 percent for the fiscal year that began in April. It attributed the downgrade to a whopping $4.4 billion hit from tariffs.

Nissan Motor suspended its profit forecast for the current year, and said that it would likely swing to an operating loss in the first quarter. The automaker, which was already restructuring its global operations before the U.S. tariffs, said it would slash an additional 11,000 jobs on top of the 9,000 cuts it announced in November.

In Japan there is a sense of disbelief and indignation among business leaders and government officials that the Trump administration backed down on China tariffs, while maintaining punishing levies on allies like Japan with significantly smaller trade imbalances.

The fact that the U.S. prioritized China over many other trade partners in reaching a tariff agreement showed that “at this stage, allies like Japan are at a disadvantage,” said Kazuhiro Maeshima, a professor of American politics and diplomacy at Sophia University in Tokyo. “This can only be seen as disregard,” he said.

Earlier this month, a 25 percent U.S. tariff on vehicle imports was extended to cover auto parts as well. Those two levies are particularly painful for Japan because automobiles and car parts are by far its biggest export to the United States.

Economists estimate that the higher auto tariffs alone could put a big dent in economic growth in Japan this year. Factoring in broader disruptions from U.S. tariff policy, officials have predicted that growth could be more than halved.

That is because the auto sector is the backbone of Japanese industry. Nissan has already planned to shift some manufacturing to the United States to skirt tariffs, and if such moves are replicated by others, it could spark a broader hollowing out of industrial production in Japan.

Japan’s biggest automaker, Toyota Motor, said last week that while it aimed to protect production and jobs in Japan, U.S. tariffs would likely cost it more than $1 billion in April and May alone.

Honda’s chief executive, Toshihiro Mibe, said on Tuesday that the company plans to expand manufacturing in the United States to try to recover some of the billions of dollars of tariff losses it forecast. That includes moving some domestic production of its hybrid Civic to a factory it operates in Indiana, he said.

Japan is also negotiating with the United States regarding the proposed 24 percent “reciprocal” tariff, which the Trump administration announced last month and then delayed until early July. The next round of trade talks is expected later this month, but progress has stalled.

Japan has said lower tariffs on cars are a necessary condition of any trade deal, a position that Prime Minister Shigeru Ishiba reiterated in parliament on Monday.

Business

Jon Voight, Sylvester Stallone and entertainment groups lobby Trump for tax provisions

Published

18 hours ago

May 13, 2025

Press Room

Jon Voight, Sylvester Stallone and entertainment groups lobby Trump for tax provisions

So-called Hollywood ambassadors Jon Voight and Sylvester Stallone joined with a coalition of entertainment industry groups for a letter delivered this week to President Trump urging him to support tax measures and a federal tax incentive that would help bring film and TV production back to the U.S.

The letter is signed by Voight, Stallone, all the major Hollywood unions and trade groups such as the Motion Picture Assn., the Producers Guild of America and the Independent Film & Television Alliance, indicating widespread support from the entertainment industry.

“Returning more production to the United States will require a national approach and broad-based policy solutions … as well as longer term initiatives such as implementing a federal film and television tax incentive,” the letter states.

In the letter, which was obtained by The Times, the groups say they support Trump’s proposal to create a new 15% corporate tax rate for domestic manufacturing activities that would use a provision from the old Section 199 of the federal tax code as a model.

Under the previous Section 199, which expired in 2017, film and TV productions that were made in the U.S. qualified as domestic manufacturing and were eligible for that tax deduction, the letter states.

The letter also asks Trump to extend Section 181 of the federal tax code and increase the caps on tax-deductible qualified film and TV production expenditures, as well as reinstating the ability to carry back losses, which the groups say would give production companies more financial stability.

The tax measures — particularly Sections 199 and 181 — are issues the entertainment industry has long advocated for, according to two people familiar with the matter who were not authorized to comment publicly. The letter itself came together over the weekend, they said. It was intended to present different measures that shared the same goal of increasing domestic production, one person said.

For the record:

3:09 p.m. May 12, 2025A previous version of this story stated Susan Sprung’s title as executive director. She is chief executive of the Producers Guild of America.

“Everything we can do to help producers mange their budgets is important,” said Susan Sprung, chief executive of the Producers Guild of America. “In an ideal world, we’d want a federal tax incentive, in addition to these tax provisions, but we want to advocate to make it as easy as possible to produce in the United States and make it as cost-effective as possible.”

Last week, Trump threw the entertainment industry into chaos after initially suggesting a 100% tariff on films made in other countries. Then, California Gov. Gavin Newsom jumped into the mix, calling for a $7.5-billion federal tax incentive to keep more productions in the U.S.

The proposals on the federal level come as states are upping their own film and TV tax credits to better compete against each other and other countries. Late last week, New York Gov. Kathy Hochul signed the state’s budget, which increased the cap for its film tax credit to $800 million a year, up from $700 million.

The expanded tax incentive program allocates $100 million for independent studios and gives additional incentives to companies that produce two or more projects in New York and commit to at least $100 million in qualified spending.

The program was also extended through 2036, which could help attract TV producers, who often want to know that their filming location is committed if they’re embarking on a series.

Production in New York has been slow, and the state needed this boost, said Michael Hackman, chief executive of Hackman Capital Partners, which owns two film and TV studio properties in the state, as well as several facilities in California. The increase from New York could also push California to increase its own film and TV tax credit program.

Last year, Newsom called to increase the annual amount allocated to California‘s film and TV tax credit program from $330 million to $750 million.

Two bills are currently going through the state legislature that would expand California’s incentive, including increasing the tax credit to cover up to 35% of qualified expenditures (or 40% in areas outside the Greater Los Angeles region), as well as expanding the types of productions that would be eligible for an incentive.

“We have the best infrastructure, the best talent, we have everything going for us,” Hackman said. “So if our state legislature can get more competitive with our tax credits, I think more productions will stay. But if they don’t, this will result in more productions continuing to leave the state and going to New York and to other locations.”