Latest news with #BasicFun!
Newsweek
02-05-2025
- Business
- Newsweek
List of Toys That Face Disappearing From Stores Due to Tariffs
Produced [by our journalists] with financial support from an organization or individual that did not approve or review the work. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Toymakers are reeling from the impact of President Donald Trump's tariffs on imports, some already warning that certain items could soon disappear from U.S. shelves. In a recent survey of 410 toy manufacturers, the Toy Association found that 81 percent of small companies were delaying orders due to the tariffs, with 64 percent canceling them outright. Among midsize companies, those figures rose to 87 percent and 80 percent, respectively Why It Matters Representatives of the industry have been lobbying for toys to be exempt from the tariffs, which the Toy Association's survey found could cause nearly half of U.S. toy companies to go out of business within months. However, the administration has so far expressed no indication of granting this exemption, President Trump recently admitting that prices could rise and leave children with fewer toys in the near future. Which Toys Could Leave the Shelves? Several toy makers have already warned that they had halted new orders due to the tariffs. Basic Fun! Florida-based Basic Fun! sells household-name toy brands including My Little Pony, Care Bears and Tonka Trucks. Jay Foreman said recently that he had paused shipments of Tonka trucks, Care Bears and other toys from China after Trump's early April tariff announcements, and would attempt to rely on the inventory already stockpiled in the U.S, according to The Associated Press. Care Bears, from Basic Fun!, are displayed at the Toy Fair, in New York's Javits Center, Monday, March 3, 2025. Care Bears, from Basic Fun!, are displayed at the Toy Fair, in New York's Javits Center, Monday, March 3, 2025. Richard Drew/AP Photo "Consumers will find Basic Fun toys in stores for a month or two but very quickly we will be out of stock and stock product will disappear from store shelves, " Foreman said. Even before the April 2 announcements, and the recent increases to China's tariff rates, Foreman said that tariffs would result in price increases across the company's entire range, which also includes Lincoln Logs and the light-up peg art toy Lite Brite. Duncan Toys Company The nearly 100-year old company, widely credited with popularizing the yo-yo, has a product line primarily focused on outdoor goods, including Frisbees, juggling balls, as well as indoor puzzle games. Josh Staph, CEO of Duncan Toys, told Agence France-Presse that he had halted shipments into the U.S. as a result of the 145-percent duties on Chinese imports. He said that while the products are designed and developed in the U.S, manufacturing takes place in China, and that most of the inventory that would be sold during the Christmas period had not yet entered the country. Staph added that other American toy companies will likely be taking similar action to avoid the new duties. Storytime Toys The Massachusetts-based company specialized in educational toys, such as storybooks and puzzles, which were manufactured in China. Storytime founder Kara Dyer said she placed a small order before the latest tariff hikes and is now pausing holiday season orders. "I'm going to hold out hope for another two weeks that the tariffs will be removed and I'll be able to place the order," she told The New York Times last week. "But if not, I will have to put my business on pause. I will definitely not place an order if the tariffs are in effect. It wouldn't make any sense." In a post to Instagram last month, Dyer said that relocating manufacturing to the U.S. would mean raising prices to prohibitively high levels. What People Are Saying Greg Ahearn, President and CEO of The Toy Association, told CNN: "A 145-percent tariff is tough on any industry, but ours is truly unique from the standpoint that 96 percent of the manufacturers here in the U.S. are considered small- or medium-sized businesses. So when you think about these businesses, and a 145-percent tariff being put on them, it's untenable for them." "No toys are currently being produced in China. And there are reports that major retailers here in the U.S. are starting to actually cancel orders," He added. "Christmas is at risk." President Donald Trump, downplayed the issue during a cabinet meet on Wednesday, saying: "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." Marshall Murdough, director at toy company Simplay 3 E-Commerce, which manufactures in the U.S, told Fox News: "The American consumer benefits because they're not going to see an additional $15 dollars tacked on to a $100 dollar item. Our prices are going to remain the same, they can trust what they see when they look at our price whether its online or in the store." Jay Foreman, CEO of Basic Fun!, wrote in an April 11 blog post: "Since 80 percent of toys sold into the United States are from China, this is catastrophic for our industry. For now, the lucky few that are making some plush, pop figures, bricks, and plastic trucks in places like Vietnam are getting a break, but the rest of us are in the firing line." Hasbro CEO Jim Cramer told CNBC that the company was making "rapid changes" to avoid the impact of the tariffs: "You know, our goal was to get to about 40 percent of global sourcing out of China by the end of 2026. I think we'll hit that much earlier." What Happens Next? The administration remains hopeful for a deal with China it says would lead to a reduction in the tariffs. Although Beijing has dismissed this possibility, Treasury Secretary Scott Bessent has called the current situation "unsustainable for China." Newsweek has reached out to the Commerce Department via email regarding the possibility of an exemption for toys.
BBC News
04-03-2025
- Business
- BBC News
Toymakers brace for Trump tariffs: 'It's killing our mojo'
The business of the North American Toy Fair, an annual showcase of the latest in silly putty, monster trucks and board games, is fun. But this year at the convention center in New York City, tariffs were killing the February, US President Donald Trump raised tariffs on products made in China by 10%. Then last week, with little warning, he announced an additional 10% border tax, which has now come into force on Tuesday, along with tariffs on Mexico and Canada. In the toy industry, which estimates that about 80% of toys sold in the US are made in China, the rapid-fire announcements have stunned businesses, leaving them scrambling to figure out how to swallow a sudden 20% rise in moves are the first of what Trump has threatened will be far wider action, making it a preview of the upheaval that could be coming for companies around the world. "It's the first thing we talk about and the last thing we talk about," toymaker Jay Foreman said this weekend from his booth at the trade show, where classic hits such as Lincoln Logs, Tonka Trucks and K'Nex were on business, Basic Fun!, makes 90% of its products in China and had been planning to counter the cost of the initial 10% tariff with a mix of higher prices for customers and lower profits, both for his firm and for his manufacturing partners. He presented the strategy to his board on Wednesday, ahead of the toy show, only to have to rip it up the next day, after Trump's later announcement. He will have to shoulder the tariff costs for products headed to stores this spring, he said, but is now expecting to raise prices for many items by at least 10% later in the year. "The reality is that tariffs will raise the cost of toys for consumers," he said. "If a customer says, 'Then I can't buy it', then I can't sell it, because I can't produce to lose money." Tariffs are a tax on imports collected by the government at the border and paid for by the companies bringing in the Trump's first term, China was the main target of the measures, with more than $360bn worth of products sent to the US getting hit by the the time, toys and many other consumer products were Trump has now applied the duties across the board, hitting almost 15% of the imports into the US each actions have been overshadowed by tariffs on products made in Mexico and Canada - America's top two trade partners, which have long operated under a free trade agreement with the US. And they fall short of the "up to 60%" tariff that Trump called for on the campaign trail last year. But with the latest move, businesses say the costs are getting too big to average effective tariff rate on imports from China now stands at roughly 34%, with recent actions amounting to a rise roughly twice as large as the increase during Trump's first four-year term as president, according to estimates by Goldman Sachs. "10% - it's something we can somehow live with. 20% is a different ball game," said Yaron Barlev, chief operating officer of Clixo, a Brooklyn-based maker of magnetic building toys which started about five years ago and signed a deal last year to start selling its toys at Target later in manufacturing in China now under way to satisfy that order, his firm, which employs 18 people in the US, is expecting to have to shoulder the costs of the border duties, scrambling its plans for profits. He said he hoped Trump would offer some kind of reprieve for toys but was not feeling especially optimistic."It's much less predictable now than he used to be so I really don't know." Trump has said his actions will help boost manufacturing in the US, by making it less cost-effective to make products overseas. But toymakers like Clixo, which had hoped to do its manufacturing in the US, say high costs and limited manufacturing capacity in the US make that idea a string of weaker economic data has raised concerns that the uncertainty due to the tariff talk is starting to cause wider economic paralysis. Basic Fun!, which employs about 165 people and does roughly $200m in sales each year, had been looking to grow. But with the threat of tariffs bearing down, Mr Foreman recently put plans for acquisitions on hold, unsure how to calculate what a business would be worth in such a changeable environment. "[A tariff] sounds good - 'Let's stick it to them!' But the ripple effect is unbelievable," Mr Forman said. The Toy Association, a business lobby group, says it is trying to make the case to the White House and Congress that toys should be exempt from tariffs, as they were before, warning that higher prices won't go unnoticed by a public already upset by the jump in prices in recent years. President Greg Ahearn said his members are largely small businesses with profit margins barely as large as the tariffs that are getting under way. "We think we have a very strong point to make and we're hoping they're going to be open to listening," he said. The Toy Fair is his organisation's marquee event, drawing businesses from around the world who line New York's convention center with cheerful displays of blocks, high-contrast baby books and spiky coloured balls. But worry about tariffs pulsed through the gathering this year."It's killing our mojo," said Mr Ahearn, noting that it was his members' top concern. From their booths, toymakers greeted questions about Trump's moves with head shakes, grimaces and disbelief. "20% is a lot," said Ada Luo, sales director for Wonderful Party, a manufacturer in Shenzhen, China, which makes Christmas light necklaces, leis and New Year's hats. "10% maybe... between the supplier and the buyer we can share, but 20%? We don't have a clue."
CNN
03-03-2025
- Business
- CNN
Trump's tariff chaos threatens an economy already flashing yellow lights
The health of the US economy is looking less and less stable by the day. Layoffs are rising. Consumer spending — the backbone of the economy — unexpectedly dropped in January. Consumer confidence has plunged. A key GDP forecast suddenly turned negative. And extreme fear is back on Wall Street as stocks slide. Despite the murky picture, President Donald Trump continues to inject chaos into the economy with almost-constant tariff threats. Now he's just hours away from lobbing tariffs on not just one or two but all three of America's biggest trading partners. Starting on Tuesday, Trump has vowed to impose a 25% tariff on imported goods from Mexico and Canada, and to double tariffs on those from China to 20%. Those tariffs — if they get imposed — could increase costs for Americans at a time when inflation remains stubbornly high. That, in turn, could prevent the Federal Reserve from lowering borrowing costs, another source of pain in the cost-of-living problem confronting consumers. Mexico and Canada have all vowed to retaliate by slapping their own tariffs on US goods, setting the stage for a potential trade war inside of North America. China has promised to respond to higher tariffs, too. Even just the threat of tariffs has a cost, causing confusion and uncertainty that makes it hard for investors, CEOs and consumers to plan. One measure of this confusion, the trade policy uncertainty index, spiked in January to the highest level in data going back to 1960. And that doesn't even factor in the latest tariff threats from the White House in recent days. Jay Foreman, the CEO of Basic Fun!, a toy company that makes Care Bears and Tonka trucks, among other goods, said his business was just starting to contend with the 10% tariffs Trump imposed across all Chinese imports that went into effect last month. Now the threat of an additional 10% tariff is potentially leaving his company with 'another $5 million gap' in its finances. That's because around 90% of all the toys Basic Fun! sells are manufactured in China. Until around 2026, the company is being forced to fully absorb the added cost of tariffs because of contracts that have already been signed with customers, Foreman told CNN. 'Every plan we have to mitigate a 10% tariff is not workable based on a 20% tariff,' he said. In Trump's ideal world, the threat of higher tariffs would cause Foreman to move production to the US. But that's simply not a financially viable option. 'There are things you aren't able to physically produce here, and toys is one of those.' China, he said, has been an unmatched location for toy production due to the manufacturing labor force, cost advantages and production capacity. But even if it were possible to move production to the US, he said it's all but guaranteed he'd have to charge higher prices. 'A $10 baby doll will go to $30. Is that what the consumer wants?' And it's hardly just companies that rely on Chinese goods that are concerned. Even the CEO of one of the largest US aluminum makers, Alcoa, warned the 25% tariffs Trump threatened across all aluminum imports could cost the United States 100,000 jobs. Underscoring the growth scare gripping investors, a closely watched projection of economic growth was sharply downgraded on Friday. The Atlanta Federal Reserve's GDPNow model now projects a 1.5% decline in GDP for the first quarter. While it's far too early to say whether GDP will indeed turn negative, it marks a swift downgrade from a growth forecast of 2.3% previously. The decline took into account the dive in consumer spending that was reported in January's Personal Consumption Expenditures report released Friday. Consumer spending makes up about two-thirds of the US economy, meaning that pullbacks in spending can have an outsized impact on GDP. In addition, uncertainty around tariffs could be weighing on the mood of American consumers, with recent consumer confidence metrics deteriorating at a historic pace. Pantheon Macroeconomics noted that the 11-point drop in the Conference Board's consumer confidence index between December and February is the biggest to start a year since 2009 — during the height of the Great Recession. Worse, the University of Michigan's consumer sentiment index's 9-point drop over that span is the most since records began in 1978. Of course, it's far too early to know whether the softening outlook for the economy economic picture is just a blip or something more concerning. Time and again the US economy has shaken off recession fears, including in 2022 after the Fed spiked interest rates to fight inflation, and in the summer of 2024 when the unemployment rate started to rise. Ed Yardeni, president of investment advisory Yardeni Research, is confident the growth scare is just a headfake caused by extremely cold weather in January and uncertainty around policies in Washington. 'It's a soft patch. I don't think it's going to last very long,' Yardeni said. 'I'm betting on the underlying resilience of the economy and that it can withstand the uncertainty of Trump 2.0.' Instead of launching a trade war, Yardeni advised Trump to 'strike a deal and claim victory' with Canada and Mexico. 'Tariffs are a toxic area. You don't want to stay there too long,' he said.
CNN
03-03-2025
- Business
- CNN
Trump's tariff chaos threatens an economy already flashing yellow lights
The health of the US economy is looking less and less stable by the day. Layoffs are rising. Consumer spending — the backbone of the economy — unexpectedly dropped in January. Consumer confidence has plunged. A key GDP forecast suddenly turned negative. And extreme fear is back on Wall Street as stocks slide. Despite the murky picture, President Donald Trump continues to inject chaos into the economy with almost-constant tariff threats. Now he's just hours away from lobbing tariffs on not just one or two but all three of America's biggest trading partners. Starting on Tuesday, Trump has vowed to impose a 25% tariff on imported goods from Mexico and Canada, and to double tariffs on those from China to 20%. Those tariffs — if they get imposed — could increase costs for Americans at a time when inflation remains stubbornly high. That, in turn, could prevent the Federal Reserve from lowering borrowing costs, another source of pain in the cost-of-living problem confronting consumers. Mexico and Canada have all vowed to retaliate by slapping their own tariffs on US goods, setting the stage for a potential trade war inside of North America. China has promised to respond to higher tariffs, too. Even just the threat of tariffs has a cost, causing confusion and uncertainty that makes it hard for investors, CEOs and consumers to plan. One measure of this confusion, the trade policy uncertainty index, spiked in January to the highest level in data going back to 1960. And that doesn't even factor in the latest tariff threats from the White House in recent days. Jay Foreman, the CEO of Basic Fun!, a toy company that makes Care Bears and Tonka trucks, among other goods, said his business was just starting to contend with the 10% tariffs Trump imposed across all Chinese imports that went into effect last month. Now the threat of an additional 10% tariff is potentially leaving his company with 'another $5 million gap' in its finances. That's because around 90% of all the toys Basic Fun! sells are manufactured in China. Until around 2026, the company is being forced to fully absorb the added cost of tariffs because of contracts that have already been signed with customers, Foreman told CNN. 'Every plan we have to mitigate a 10% tariff is not workable based on a 20% tariff,' he said. In Trump's ideal world, the threat of higher tariffs would cause Foreman to move production to the US. But that's simply not a financially viable option. 'There are things you aren't able to physically produce here, and toys is one of those.' China, he said, has been an unmatched location for toy production due to the manufacturing labor force, cost advantages and production capacity. But even if it were possible to move production to the US, he said it's all but guaranteed he'd have to charge higher prices. 'A $10 baby doll will go to $30. Is that what the consumer wants?' And it's hardly just companies that rely on Chinese goods that are concerned. Even the CEO of one of the largest US aluminum makers, Alcoa, warned the 25% tariffs Trump threatened across all aluminum imports could cost the United States 100,000 jobs. Underscoring the growth scare gripping investors, a closely watched projection of economic growth was sharply downgraded on Friday. The Atlanta Federal Reserve's GDPNow model now projects a 1.5% decline in GDP for the first quarter. While it's far too early to say whether GDP will indeed turn negative, it marks a swift downgrade from a growth forecast of 2.3% previously. The decline took into account the dive in consumer spending that was reported in January's Personal Consumption Expenditures report released Friday. Consumer spending makes up about two-thirds of the US economy, meaning that pullbacks in spending can have an outsized impact on GDP. In addition, uncertainty around tariffs could be weighing on the mood of American consumers, with recent consumer confidence metrics deteriorating at a historic pace. Pantheon Macroeconomics noted that the 11-point drop in the Conference Board's consumer confidence index between December and February is the biggest to start a year since 2009 — during the height of the Great Recession. Worse, the University of Michigan's consumer sentiment index's 9-point drop over that span is the most since records began in 1978. Of course, it's far too early to know whether the softening outlook for the economy economic picture is just a blip or something more concerning. Time and again the US economy has shaken off recession fears, including in 2022 after the Fed spiked interest rates to fight inflation, and in the summer of 2024 when the unemployment rate started to rise. Ed Yardeni, president of investment advisory Yardeni Research, is confident the growth scare is just a headfake caused by extremely cold weather in January and uncertainty around policies in Washington. 'It's a soft patch. I don't think it's going to last very long,' Yardeni said. 'I'm betting on the underlying resilience of the economy and that it can withstand the uncertainty of Trump 2.0.' Instead of launching a trade war, Yardeni advised Trump to 'strike a deal and claim victory' with Canada and Mexico. 'Tariffs are a toxic area. You don't want to stay there too long,' he said.
CNN
03-03-2025
- Business
- CNN
Trump's tariff chaos threatens an economy already flashing yellow lights
The health of the US economy is looking less and less stable by the day. Layoffs are rising. Consumer spending — the backbone of the economy — unexpectedly dropped in January. Consumer confidence has plunged. A key GDP forecast suddenly turned negative. And extreme fear is back on Wall Street as stocks slide. Despite the murky picture, President Donald Trump continues to inject chaos into the economy with almost-constant tariff threats. Now he's just hours away from lobbing tariffs on not just one or two but all three of America's biggest trading partners. Starting on Tuesday, Trump has vowed to impose a 25% tariff on imported goods from Mexico and Canada, and to double tariffs on those from China to 20%. Those tariffs — if they get imposed — could increase costs for Americans at a time when inflation remains stubbornly high. That, in turn, could prevent the Federal Reserve from lowering borrowing costs, another source of pain in the cost-of-living problem confronting consumers. Mexico and Canada have all vowed to retaliate by slapping their own tariffs on US goods, setting the stage for a potential trade war inside of North America. China has promised to respond to higher tariffs, too. Even just the threat of tariffs has a cost, causing confusion and uncertainty that makes it hard for investors, CEOs and consumers to plan. One measure of this confusion, the trade policy uncertainty index, spiked in January to the highest level in data going back to 1960. And that doesn't even factor in the latest tariff threats from the White House in recent days. Jay Foreman, the CEO of Basic Fun!, a toy company that makes Care Bears and Tonka trucks, among other goods, said his business was just starting to contend with the 10% tariffs Trump imposed across all Chinese imports that went into effect last month. Now the threat of an additional 10% tariff is potentially leaving his company with 'another $5 million gap' in its finances. That's because around 90% of all the toys Basic Fun! sells are manufactured in China. Until around 2026, the company is being forced to fully absorb the added cost of tariffs because of contracts that have already been signed with customers, Foreman told CNN. 'Every plan we have to mitigate a 10% tariff is not workable based on a 20% tariff,' he said. In Trump's ideal world, the threat of higher tariffs would cause Foreman to move production to the US. But that's simply not a financially viable option. 'There are things you aren't able to physically produce here, and toys is one of those.' China, he said, has been an unmatched location for toy production due to the manufacturing labor force, cost advantages and production capacity. But even if it were possible to move production to the US, he said it's all but guaranteed he'd have to charge higher prices. 'A $10 baby doll will go to $30. Is that what the consumer wants?' And it's hardly just companies that rely on Chinese goods that are concerned. Even the CEO of one of the largest US aluminum makers, Alcoa, warned the 25% tariffs Trump threatened across all aluminum imports could cost the United States 100,000 jobs. Underscoring the growth scare gripping investors, a closely watched projection of economic growth was sharply downgraded on Friday. The Atlanta Federal Reserve's GDPNow model now projects a 1.5% decline in GDP for the first quarter. While it's far too early to say whether GDP will indeed turn negative, it marks a swift downgrade from a growth forecast of 2.3% previously. The decline took into account the dive in consumer spending that was reported in January's Personal Consumption Expenditures report released Friday. Consumer spending makes up about two-thirds of the US economy, meaning that pullbacks in spending can have an outsized impact on GDP. In addition, uncertainty around tariffs could be weighing on the mood of American consumers, with recent consumer confidence metrics deteriorating at a historic pace. Pantheon Macroeconomics noted that the 11-point drop in the Conference Board's consumer confidence index between December and February is the biggest to start a year since 2009 — during the height of the Great Recession. Worse, the University of Michigan's consumer sentiment index's 9-point drop over that span is the most since records began in 1978. Of course, it's far too early to know whether the softening outlook for the economy economic picture is just a blip or something more concerning. Time and again the US economy has shaken off recession fears, including in 2022 after the Fed spiked interest rates to fight inflation, and in the summer of 2024 when the unemployment rate started to rise. Ed Yardeni, president of investment advisory Yardeni Research, is confident the growth scare is just a headfake caused by extremely cold weather in January and uncertainty around policies in Washington. 'It's a soft patch. I don't think it's going to last very long,' Yardeni said. 'I'm betting on the underlying resilience of the economy and that it can withstand the uncertainty of Trump 2.0.' Instead of launching a trade war, Yardeni advised Trump to 'strike a deal and claim victory' with Canada and Mexico. 'Tariffs are a toxic area. You don't want to stay there too long,' he said.
