If anyone doubted the magnitude of the task that the Toy Association and US toy companies are facing in persuading Trump to exempt the toy market from his onerous Chinese tariffs, they now know exactly what they’re up against. This is a direct quote from Trump, speaking apparently ‘off the cuff’ during a press conference held this Wednesday: “Somebody said, ‘Oh, the shelves are gonna be open.’ Well, maybe the children will have two dolls instead of 30 dolls, you know. And maybe the two dolls will cost a couple of bucks more than they would normally.”
Insouciance, flippancy and financial naivety in a single sentence – unfortunately, the carefully crafted messaging and compelling arguments raised by the US toy community clearly haven’t landed as intended. That’s a great shame, but also perhaps not a huge surprise. After all, as Trump reminded everyone this week, he did say repeatedly on the campaign trail that he was going to introduce tariffs – and some business leaders still voted for him! It’s almost as if they didn’t believe he was telling the truth. Sadly, they now know that he wasn’t bluffing. And we’re all paying the price, one way or another…
In the real world, it’s starting to dawn on US consumers that it is them who will be responsible for paying the consumer tax of tariffs, not China as has been intimated by the administration. Indeed, so incensed was Trump after hearing on the grapevine that Amazon was planning to itemise the tariff cost separately on its invoices, a call with Jeff Bezos was hastily arranged. Hours later, Amazon denied that was ever the intention and confirmed that it wouldn’t be taking the idea forward. However, some other retailers and suppliers are already doing this – including Fat Brain. I wonder if Trump will be in touch to accuse them of a “hostile and political act”, as was the case with Amazon. Of course, it is nothing of the kind, it is simply transparency – and to pretend otherwise is just gaslighting the American public.
We’re seeing other knock-on effects of the tariff situation: someone sent me video footage from LA this week, showing that the buildings in which toy companies are located in El Segundo were almost as quiet as The Entertainer stores on a Sunday. A very sad sight, although again, arguably not a massive surprise – I had picked up reports of people pulling out over the past few weeks, but it seems there were even more people taking that decision that anyone anticipated. Some people who made the trip have talked about the benefit spending quality time with customers and writing orders, so there were positives – but clearly the trip hasn’t attracted the numbers expected before the tariff situation exploded. I am sure it will be a very different story in September… assuming the tariffs aren’t still in place by then.
In the meantime, there’s a feeling of being in limbo, which reminds me of the early days of the pandemic in many ways. There is talk of caution and prudence, which makes perfect sense, especially for US companies directly affected by the tariff chaos…. but if Covid taught us anything, it is that over-reacting doesn’t help in the medium-long term. It’s all very well being a soft drink manufacturer and cutting marketing and product development… people will still buy Coke / Pepsi. If companies stop creating and marketing toys, it’s a very different story, especially here in the UK & Europe where we don’t have tariffs and are doing our best to capitalise on a respectable start to the year for the toy market. The need for cool, calm heads has rarely been greater – while collectively maintaining the pressure on the US administration in the hope that the penny might finally drop that there is a lot more at stake than “a couple of dolls.”
In that respect, I tip my hat to Learning Resources, which filed a lawsuit last week challenging Trump’s asserted authority to impose tariffs on imports under the International Emergency Economic Powers Act (‘IEEPA’). Words are important, but actions arguably even more so. At a time when some US companies are electing to keep their heads down, I admire Learning Resources’ courage and determination.
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