They have been quite the talk lately. If they continue to get slowly implemented for more and more industries, this could reflect on 85% of toys in the US, Asia Times reports.
“Well, if we woke up one day and all of a sudden there’s a tariff, what would we do? It’s a difficult thing for us,” Bob Grubba told Xinhua. Bob Grubba is the president and CEO of Broadway Limited Imports – the biggest US import firm in the model train industry.
“If we were to have the 25-percent tariff imposed on this product, if we couldn’t find a way around that, it would probably put us out of business,” said Grubba. “This whole industry, almost everything in the industry is manufactured in China,” he said.
Grubba dds that most toy companies have a profit margin in the range of 30%. If a 25% tariff becomes a reality the 5% left aren’t enough for bills and salaries. So, companies will either have to go out of business or raise prices.
High prices won’t be something people like. “There are probably 1,000 hobby stores in the US that sell this type of product. Each of those … maybe … has five to 10 employees, so that’s another 5,000 people. I think those hobby stores are likely to close,” he added. Relocating production elsewhere is even more difficult and expensive, Grubba says.
Rebecca Mond, vice president of the Federal Government Affairs for the Toy Association, agrees. She says if tariffs are put in place this will wreak havoc on the holiday sales. She also adds that toy prices will go up by 15% and 68 000 people from an industry with more than 690 000 employees could lose their jobs. Hopefully that won’t happen and toys will be able to focus on what toys should be focusing on – making kids happy.