logo
Will China tariffs ruin Christmas? Trump doesn't rule out fewer toys on the shelves.

Will China tariffs ruin Christmas? Trump doesn't rule out fewer toys on the shelves.

Boston Globe01-05-2025

'It'll happen,' he said. Then, in one of his trademark asides: 'Somebody said, 'Oh, the shelves are going to 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.'
Get Starting Point
A guide through the most important stories of the morning, delivered Monday through Friday.
Enter Email
Sign Up
It was an uncharacteristic swipe at kiddie consumerism — and a shrug at potential holiday shortages. It sounds unreal — the president of the richest country shrugging off empty store shelves. But the risk is very real.
Advertisement
'We have a frozen supply chain that is putting Christmas at risk,' Greg Ahearn, chief executive of the Toy Association, a US industry group representing 900 companies,
China produces nearly 80 percent of all toys and 90 percent of Christmas goods sold in America, according to the Times. Those imports are being hit with tariffs of up to 145 percent.
Advertisement
And it's not just toys that could be in short supply. Shoes and apparel, furniture, auto parts, hardware products, and smartphones top the list of US imports from China.
'While the level and application of tariffs on China across products is still in flux, it is quite possible that we will see serious product shortages,' said Boston College economist Brian Bethune.
Still, it's too soon to write off Christmas, or Halloween (the China-dependent costume industry is
'So much can still happen on the trade front and we anticipate a partial roll back of tariffs in the coming months,' said Gregory Daco, chief economist at consulting firm EY-Parthenon.
'We're going to see supply disruptions for sure. The question is really what happens with tariffs in the coming weeks as there currently is an inventory buffer to prevent shortages.'
New data show just how much companies rushed to stock up.
Imports surged 40 percent in the first three months of the year, the Commerce Department
The increase, the biggest since the economy was reopening from the pandemic in the third quarter of 2020, was fueled by 'frontloading' — businesses buying up imported goods before new tariffs kicked in.
The gap between imports and exports cut a record 5 percentage points from gross domestic product, leaving the economy 0.3 percent smaller in the first quarter than in the final three months of 2024. (Imports subtract from GDP because they represent spending on goods made elsewhere.)
While it was the first drop in quarterly GDP in three years, a recession isn't a foregone conclusion.
Advertisement
The tariff shock could prove temporary. A separate measure of economic health — called
Trump trade adviser Peter Navarro told CNBC that the GDP report was 'the best negative print I have ever seen in my life.'
But there's good reason to be nervous.
Frontloading sets the stage for a sharp falloff in purchases down the road, Daco, the EY-Parthenon economist, said in a note. That will be a 'far more troubling phase of the ongoing economic slowdown,' he said.
Trump's tariff wall is unraveling a post-World War II trading system built on cheap imports.
Trump says his trade policy will revitalize US manufacturing, create good—paying factory jobs, and generate revenues that can be used to lower taxes. He's warned of initial disruption but insists the country will be better off in the long run.
But most economists — and a growing number of business leaders — disagree. Consumer confidence has plunged.
Forecasters put
What's next?
A
Advertisement
But there's no denying the outlook has darkened.
Recession or not, too much winning isn't likely to be our big problem this year.
Material from prior Globe coverage was used in this report.
Larry Edelman can be reached at

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

China's maritime lead a security threat, say ‘Zero Point Four' authors
China's maritime lead a security threat, say ‘Zero Point Four' authors

Yahoo

time33 minutes ago

  • Yahoo

China's maritime lead a security threat, say ‘Zero Point Four' authors

A significant decline in the number of U.S.-flagged vessels and the collapse of domestic shipbuilding have created vulnerabilities in national security, say two of the co-authors of 'Zero Point Four: How U.S. Leadership in Maritime Will Secure America's Future.' James Watson and Carleen Lyden Walker said the U.S. maritime industry is at a critical moment. U.S.-flagged ships have declined to a 0.4% (200 ships) of the estimated 55,000 oceangoing vessels serving the global supply chain. 'We have lost our [maritime] leadership as a nation and we can recapture that if we decide to recognize the incredible impact of maritime security on national security, economic, energy, and food, climate and workforce,' Walker told FreightWaves in an interview. Watson and Walker said the U.S. has become so dependent on foreign-manufactured ships that it has created vulnerability in supply chains and risks shortages in military maritime than 90% of the world's goods and energy travel by ship, and most people don't understand the U.S. dependency on the maritime industry, the authors said. 'The big part of why we wrote the book … is all the opportunities that actually do exist for investments by Americans into American ships, but also industries that involve the oceans, that involve what we call the fourth industrial revolution, the use of AI, the use of the developments in science and technology that ought to be opportunities for America to basically leapfrog China,' Watson said. Watson is a retired Rear Adm. in the U.S. Coast Guard and is currently an independent consultant providing business development services to maritime clients. Walker is co-founder and managing partner of the Maritime Accelerator for Resilience and co-founder and CEO of the North American Marine Environment Protection Association.'Zero Point Four' was published in March 2024. In addition to Watson and Walker, the book was co-authored by global supply chain specialist Jonathan Kempe; technology and sustainability economist Nishan Degnarain; enterprise resilience veteran Rich Mason; and Anuj Chopra, managing director of the MaritimESG Middle East Project Management LLC. While the trade war between China and the United States appears to be cooling off in recent weeks, the nation's push to revitalize the nation's shipbuilding industry is gaining momentum. In February, the White House proposed port fees for China-built, -owned and -operated ships docking at American ports. The fees aim to minimize China's maritime dominance and help kick-start U.S. shipbuilding. The initial proposal called for vessels operated by Chinese companies to pay a $1 million port call fees and ships built in China would have to pay a $1.5 million fee per port call. The proposal now calls for fees based on net tonnage and number of containers carried. The Office of the U.S. Trade Representative also recently announced exemptions from the fees for ships carrying liquified natural gas. The USTR is accepting comments through July 7 from the maritime community on the impact of port fees associated with Chinese ships. New fees proposed by the USTR are set to take effect on Oct. 14. President Donald Trump also signed an executive order on April 9 that aims to boost the U.S. international maritime presence, which has been in decline for decades. On April 20, a bipartisan bill — the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act of 2025 (the SHIPS Act) — was introduced in Congress with the aim of expanding the U.S.-flag international fleet by 250 ships in 10 years, while enhancing U.S. competitiveness and making more investments in the maritime workforce.A predecessor bill, the SHIPS for America Act of 2024, garnered bipartisan support last year during the Biden administration. Walker said placing fees on Chinese-built ships might ultimately hurt American consumers instead of creating more domestic ship production in the U.S. 'Passing the cost of our deficiency on to the consumer, which is what will happen with these taxes, if you will, on Chinese-built ships, I don't know how viable that is,' Walker said. 'It's like tariffs: The ultimate payor is going to be the American consumer.' Walker said a more viable proposal could be a tariff hike on U.S.-flagged ships doing repair work in shipyards in China. The tariff could be an impetus for U.S. ships to be repaired in domestic shipyards. U.S. officials floated the idea of imposing a 200% duty for work carried out on many U.S.-flag ships at yards in 'countries of concern,' according to the SHIPS Act. 'I think that one of the possibilities is restricting U.S.-flagged Jones Act ships from doing ship repair in China, which they do, and that could be a first step,' Walker said. Of 80,000 U.S. port calls each year, only a very small percentage are currently by U.S.-registered ships. '[The U.S.] intentionally walked away from its shipbuilding capability in the 1980s … and to blame China for recognizing an opportunity and capitalizing on it, I think is the wrong cast,' Walker said. 'I would rather see us say, 'Well, look, China in the early 1990s is when they decided to become a shipbuilding nation.' In the last 35 years, they have become the dominant shipbuilding nation with about 60% of the order book. How they got there also needs to be recognized.' Watson said for various reasons — including cost and efficiency — many companies in the U.S. in the 1970s and 1980s decided to outsource shipbuilding to countries such as Japan and South Korea initially. 'I think what happened was they just said, 'Well, we can just sacrifice that industry and we can buy ships from Korea and Japan, because they're building fine ships over there, and use our open registries to help the world globalize even more and focus on military shipbuilding,' Watson said. 'Then the Cold War ended and we looked around and took our peace dividend, balanced the budget again, and realized we didn't have a commercial shipbuilding industry anymore. So we just stuck … with the plan to buy ships from Japan and Korea, and then I think China saw the opportunity.' Walker and Watson said maritime security not only impacts national security, it impacts energy security, environmental security, economic security and workforce development. 'We think we can lead the world, but we probably shouldn't basically give away our designs and our technology to the cheapest place in the world to build,' Watson said. 'I guess just going to my position on the USTR thing … some of the things that they're doing probably have a time and a place and maybe now is the time and the place to do it.' Watson said it's critical that the government produce programs to restore the maritime industry in the U.S. 'You've got to have a program that creates investment here,' Watson said. 'If you look at the CHIPS Act, for example, where you actually have an act of Congress instead of effectively an executive decision of an agency, then you can put in some provisions that are bankable. You can have companies invest in a legislative initiative with a lot more security that it won't flip in four years compared to an executive mandate, like a tariff or a penalty on Chinese shipping.' The ultimate goal the U.S. government should be looking for is bringing in more mariners and reinvigorating the country's industrial shipbuilding complex, Watson and Walker said. 'It's the ships that come first,' Watson said. 'Then that causes an interest in terminals and shipyards and everything else. So there's been a lot of talk about … 'We've got to be more involved in the Panama Canal, we've got to stop [China's] Belt and Road Initiative.' If we just had a robust marine industry, a ship-operating industry, if we had merchant mariners, if we had the lead on marine technology, we would naturally want to own the terminals and the ships and have stakeholdings in great shipyards to service our ships.' The post China's maritime lead a security threat, say 'Zero Point Four' authors appeared first on FreightWaves.

Stock market today: Dow, S&P 500, Nasdaq futures tread water as US-China trade talks enter second day
Stock market today: Dow, S&P 500, Nasdaq futures tread water as US-China trade talks enter second day

Yahoo

time41 minutes ago

  • Yahoo

Stock market today: Dow, S&P 500, Nasdaq futures tread water as US-China trade talks enter second day

US stock futures were stuck in a holding pattern on Tuesday as renewed US-China trade talks entered their second day after an upbeat initial meeting. Futures on the Dow Jones Industrial Average (YM=F), the S&P 500 (ES=F), and the tech-heavy Nasdaq 100 (NQ=F) all wavered around the flat line. The mood is cautious as investors keep a close eye on the trade talks, which restarted in the morning in London. While a deal on access to China's rare earth minerals is the US priority, negotiators are navigating contentious issues that have fueled a rift between the two trading partners. Any signs of progress will likely be greeted with relief by markets, given switchbacks in President Trump's tariff policy and in US-China relations have fed uncertainty about risks to economic growth worldwide. On Monday, stocks on Wall Street edged higher after White House officials suggested discussions had been productive — though Trump himself cautioned that "China's not easy". Read more: The latest on Trump's tariffs Chinese stocks slid suddenly on Tuesday before the meeting resumed, a bout of volatility that suggested investors aren't confident of success. 'The market is too sensitive,' Fu Shifeng, investment director at Cheng Zhou Investment, told Bloomberg. 'People seem to be speculating that the talks didn't go well.' Meanwhile, a gauge of US small-business optimism came in higher in May — the first rise since September — amid the trade truce with China. But worries about Trump's tax-and-spending megabill stoked uncertainty about the outlook, the NFIB survey found. Investors are now counting down to the release of the May Consumer Price Index (CPI) report on Wednesday. The report will offer fresh insight into the state of inflation amid Trump's evolving trade policy. Analysts expect to see price pressures accelerated last month. Shares of J.M. Smucker (SJM) are sinking premarket after the food producer forecast full-year profit below Wall Street expectations. Smucker projected adjusted earnings for the year to come in at $9.50 a share, compared to estimates of $10.25, per Bloomberg. It highlights the challenging environment for consumer packaged goods as consumers pull back on spending on items like Jif peanut butter, Milk-Bone pet treats, and Hostess snack cakes. Smucker also noted it would raise prices as tariffs weigh on its coffee business. J.M. Smucker stock fell over 7% following the company's quarterly results. Economic data: NFIB small business optimism (May) Earnings: Academy Sports and Outdoors (ASO), Dave & Buster's (PLAY), GameStop (GME), The J.M. Smucker Company (SJM), Stitch Fix (SFIX) Here are some of the biggest stories you may have missed overnight and early this morning: The labor market is creating new jobs — but maybe not yours Trump says China 'not easy' as trade talks to continue Tuesday IBM takes a big step toward useful quantum computing China stocks drop suddenly in wait for trade talks Big Tech is driving bullish flows in US stocks: Citi Nvidia, HPE to build new supercomputer in Germany Reddit vs. Anthropic: The AI scraping war is heating up again Wary Wall Street positioning leaves room for S&P 500 to rally Here are some top stocks trending on Yahoo Finance in premarket trading: Tesla, Inc. (TSLA) stock rose 2% before the bell on Tuesday, after being hit with 2 downgrades on Monday due to the fallout from CEO Elon Musk and President Trump's dustup. Tesla's robotaxi test is set to take place on June 12 in Austin, Texas. McDonald's (MCD) shares fell over 1% in premarket trading today after analysts at Morgan Stanley downgraded the fast food company on Monday to a Hold from a Buy. Morgan Stanley also cut its price target to $324 from $329. Bloomberg reports: US technology heavyweights have attracted a flurry of bullish bets as optimism around the economic outlook overshadows trade concerns, according to Citigroup Inc. (C) strategists. Long positions in the technology-heavy Nasdaq 100 (^NDX) increased by more than in the S&P 500 (^GSPC) last week, the team led by Chris Montagu wrote in a note. Exposure has been mainly driven by new bullish bets, while short bets steadily declined across indexes, they said. Read more here. Chinese stocks fell on Tuesday ahead of the second day of trade negotiations between the US and China. Investors are cautious as the two biggest economies seek to resolve some contentious issues. Bloomberg News reports: Read more here. When President Trump set off a global stock market slump in April with his package of sweeping new tariffs, small investors across Asia rushed to the US stock market to buy the dip. Now they're backing away, data for May shows. Bloomberg reports: Read more here. Apple (AAPL) is holding its highly anticipated annual developers' conference. Yahoo Finance's Daniel Howley reports from Silicon Valley: Apple on Monday announced sweeping changes to its product ecosystems, including a wide-ranging revamp of its iOS operating system for its iPhones, as well as the software that powers its iPads and Macs. The updates, which the company debuted as part of its WWDC developer event held at its headquarters in Cupertino, Calif., mark the biggest shift in Apple's software design in years. Still, the improvements were light on new AI capabilities at a time when Wall Street is looking for Apple to prove it can compete in the space. ... While Apple showed off a handful of new features for its Apple Intelligence platform, it's unlikely to quell fears that the company is falling behind the likes of Microsoft and Google in the rapidly evolving space. Read more on Apple's announcements here. Shares of J.M. Smucker (SJM) are sinking premarket after the food producer forecast full-year profit below Wall Street expectations. Smucker projected adjusted earnings for the year to come in at $9.50 a share, compared to estimates of $10.25, per Bloomberg. It highlights the challenging environment for consumer packaged goods as consumers pull back on spending on items like Jif peanut butter, Milk-Bone pet treats, and Hostess snack cakes. Smucker also noted it would raise prices as tariffs weigh on its coffee business. J.M. Smucker stock fell over 7% following the company's quarterly results. Economic data: NFIB small business optimism (May) Earnings: Academy Sports and Outdoors (ASO), Dave & Buster's (PLAY), GameStop (GME), The J.M. Smucker Company (SJM), Stitch Fix (SFIX) Here are some of the biggest stories you may have missed overnight and early this morning: The labor market is creating new jobs — but maybe not yours Trump says China 'not easy' as trade talks to continue Tuesday IBM takes a big step toward useful quantum computing China stocks drop suddenly in wait for trade talks Big Tech is driving bullish flows in US stocks: Citi Nvidia, HPE to build new supercomputer in Germany Reddit vs. Anthropic: The AI scraping war is heating up again Wary Wall Street positioning leaves room for S&P 500 to rally Here are some top stocks trending on Yahoo Finance in premarket trading: Tesla, Inc. (TSLA) stock rose 2% before the bell on Tuesday, after being hit with 2 downgrades on Monday due to the fallout from CEO Elon Musk and President Trump's dustup. Tesla's robotaxi test is set to take place on June 12 in Austin, Texas. McDonald's (MCD) shares fell over 1% in premarket trading today after analysts at Morgan Stanley downgraded the fast food company on Monday to a Hold from a Buy. Morgan Stanley also cut its price target to $324 from $329. Bloomberg reports: US technology heavyweights have attracted a flurry of bullish bets as optimism around the economic outlook overshadows trade concerns, according to Citigroup Inc. (C) strategists. Long positions in the technology-heavy Nasdaq 100 (^NDX) increased by more than in the S&P 500 (^GSPC) last week, the team led by Chris Montagu wrote in a note. Exposure has been mainly driven by new bullish bets, while short bets steadily declined across indexes, they said. Read more here. Chinese stocks fell on Tuesday ahead of the second day of trade negotiations between the US and China. Investors are cautious as the two biggest economies seek to resolve some contentious issues. Bloomberg News reports: Read more here. When President Trump set off a global stock market slump in April with his package of sweeping new tariffs, small investors across Asia rushed to the US stock market to buy the dip. Now they're backing away, data for May shows. Bloomberg reports: Read more here. Apple (AAPL) is holding its highly anticipated annual developers' conference. Yahoo Finance's Daniel Howley reports from Silicon Valley: Apple on Monday announced sweeping changes to its product ecosystems, including a wide-ranging revamp of its iOS operating system for its iPhones, as well as the software that powers its iPads and Macs. The updates, which the company debuted as part of its WWDC developer event held at its headquarters in Cupertino, Calif., mark the biggest shift in Apple's software design in years. Still, the improvements were light on new AI capabilities at a time when Wall Street is looking for Apple to prove it can compete in the space. ... While Apple showed off a handful of new features for its Apple Intelligence platform, it's unlikely to quell fears that the company is falling behind the likes of Microsoft and Google in the rapidly evolving space. Read more on Apple's announcements here.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store