EDITOR’S NOTE: This week we’re publishing our very good friend John’s beloved Friday Blog in its entirety. If you read to the end, you’ll see that John is undergoing surgery next week and will, of course, be pausing the blog while he recovers. All of us at Global Toy News send John the very best for a speedy recovery and a swift return to this important weekly feature. John’s love and care for the toy industry has been a constant throughout his career, and we are hopeful for the best possible outcome and very soon again hearing his voice and hanging on his invaluable insights.
Once again, the global toy community finds itself facing significant external factors over which it has absolutely zero control, but which will have a seismic impact on the coming months’ trading. My hopes of a quiet, boring year have been well and truly dashed, and we’re still only in Q1.
I have been trying to find the positives from this awful situation, and so far, all I’ve managed to come up with is the fact that this is happening early in the year, months before peak season. If you believe the rhetoric coming from President Trump, this will be but a distant memory by the time we reach the business end of the year.
However, how much damage will be inflicted on the global economy in the interim is anyone’s guess. I don’t want to be alarmist, but I have a horrible feeling that Trump may not have entirely thought it through before starting something with no clear idea of what the end goal would be. Countless lives lost, billions of dollars spent, stock markets around the world crashing, the price of oil and gas rising to damaging heights… for what? For some reason, the Smiths song I Started Something I Couldn’t Finish springs to mind…
While it’s a struggle to see what anyone is getting out of this war, the impact it is having on the global economy is abundantly clear to all. The Strait of Hormuz being off limits for the foreseeable future presents a major problem on so many levels. 20% of global oil shipments traditionally pass through this narrow stretch of water, now effectively closed. On top of the ongoing problems in the Suez Canal, this just adds to the sense of chaos and disruption facing shipping companies. The Cape of Good Hope detour adds up to two weeks and considerable additional cost to freight coming from the Far East, while there have already been reports of carriers dumping cargo at random ports and leaving freight forwarders to sort out the mess. And it isn’t just sea freight being affected: the cancellation of a huge number of flights will have a knock-on effect on air freight too. I also hear on the grapevine that the price of plastic has already risen steeply.
Basically, it’s a complete Ship Show. Someone suggested that at $1.20 a barrel, the global economy ceases to function. And we’re currently hovering a mere 20% below that red line, after multiple ships were attacked in the Hormuz Strait. I am not sure that President Trump’s attempts at reassurance landed quite the way he hoped: “Oil will be coming down. That’s just a matter of war that happens. You can almost predict it. I would say it went up a little bit less than we thought. It’s going to come down more than anybody understands.” Although when even the largest intervention in the oil markets in modern history barely budged the price of crude oil earlier this week, I find myself firmly in the ‘colour me sceptical’ camp.
The one saving grace is that there are signs that the US government may have realised it has bitten off considerably more than it can chew and is looking for a face-saving way out. We can but hope that when that happens, prices fall as fast as they rose – ever the optimist…
In the meantime, as if it didn’t already have enough on its plate, it was announced this week that the US government is launching an investigation into some of its biggest trading partners, after the Supreme Court struck down a key part of President Trump’s tariff policy last month. According to sources, the probe into unfair trade practices could lead to new levies against countries including China, the European Union, India and Mexico by this summer. So, tariffs by another name…? It’s like whack-a-mole: you hit one daft policy on the head and another one pops straight up.
Ultimately, though, there is literally nothing that any of us can do about these issues – so the only option is to focus on the things we can control rather than the things we can’t. Rarely has the ‘keep calm and carry on’ mantra been more applicable.
In the midst of all this, I feel slightly guilty about saying this, but for the first time in fifteen years, the Friday Blog is about to go dark – but fret not, only temporarily. Since launching Toy World in September 2011, I have never missed writing a Blog – even when I am on holiday or at a trade show. But on this occasion, the situation is a bit different: as regular readers will know, I have been facing some health issues over the past year, and next week, I will be going under the knife – or more accurately, the robotic laser – in an attempt to resolve the problem once and for all. My surgeon has apparently completed over 14,000 operations of this nature, so I feel I am in good hands. But like all operations, I will need some recovery time. So, the Blog will most definitely return… as soon as I am feeling up to it.
In the meantime, thanks in advance for being helpful to the Toy World team in my absence and sending everything through in good time – contrary to what a handful of people seem to believe, we don’t just make deadlines up for fun, we genuinely do need material by the given dates to enable us to turn everything round in good time. We have a couple of substantial issues coming up in April and May, so your support and co-operation is greatly appreciated. I don’t want to come back to a stressed team – on my return, I’d like to find everyone happy and chilled, and saying that everything is under control and there’s nothing to worry about. Thank you for your attention to this matter. See you on the other side.
