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Boston Globe
01-05-2025
- Business
- Boston Globe
Will China tariffs ruin Christmas? Trump doesn't rule out fewer toys on the shelves.
'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
New York Times
30-04-2025
- Business
- New York Times
Trump, on Tariffs, Says ‘Maybe the Children Will Have 2 Dolls Instead of 30'
President Trump has a message for the nation's children: Prepare to sacrifice for your country. He was taking questions at the end of one of his marathon cabinet meetings when he finally allowed that, yes, his tariff policies and the trade war he has set off with China may soon result in some emptier-than-usual shelves in stores. Specifically, toy stores. 'You know, somebody said, 'Oh, the shelves are going to be open,'' Mr. Trump said. '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.' This, from the billionaire, crypto-salesman, golf-club-operating, Palm Beach-by-way-of-Fifth Avenue president with the golden office and the golden triplex apartment. There he sat, surrounded by the other billionaires with whom he has filled his cabinet, telling the boys and girls of America they'll just have to make do with fewer toys this year for the greater good. This grinchy pronouncement by the president had the value of being truthful. Many American toymakers and retailers have started to pause their orders as the effects of Mr. Trump's tariffs ripple out, threatening to snarl supply chains. It could all have a big impact on this year's holiday season since it takes months to manufacture, package and ship many products to the United States. Greg Ahearn, chief executive of the Toy Association, a U.S. industry group representing 850 toy manufacturers, told The Times that there is now a 'frozen supply chain that is putting Christmas at risk.' 'If we don't start production soon,' Mr. Ahearn said, 'there's a high probability of a toy shortage this holiday season.' You hear that, kids?
Axios
30-04-2025
- Business
- Axios
Trump on possible toy shortage: "Maybe the children will have two dolls instead of 30"
President Trump appeared to acknowledge Wednesday that toy shortages are possible as his tariff hikes ripple through the economy. Why it matters: American retailers are growing worried that the president's trade war and increased volatility will lead to empty shelves, higher prices and store closures as Chinese imports screech to a halt. The CEOs of Walmart, Target and Home Depot privately warned him last week about the likelihood of product shortages and price spikes. Driving the news: "Somebody said, 'oh, the shelves are gonna be open,'" Trump told reporters Wednesday. "Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more." The big picture: His comments came amid growing concern that that the 2025 holiday shopping season will be significantly disrupted. Toy Association CEO Greg Ahearn told the New York Times this week that the industry is facing "a frozen supply chain that is putting Christmas at risk." "If we don't start production soon, there's a high probability of a toy shortage this holiday season," Ahearn said. Zoom out: Trump argues that higher tariffs will force manufacturers to produce more goods in the U.S., creating jobs and tax revenue. But critics say it will lead to higher prices and hurt American exporters. Reality check:"There will be a Christmas, and people will celebrate Christmas, and they will buy items, and we will sell them those items," Walmart CEO Doug McMillon told reporters earlier this month.
Time of India
30-04-2025
- Business
- Time of India
Retailers fear toy shortages at Christmas as tariffs freeze supply chain
Toy makers, children's shops and specialty retailers are pausing orders for the winter holidays as the import taxes cascade through supply chains. Factories in China produce nearly 80 per cent of all toys and 90 per cent of Christmas goods sold in the United States. The production of toys, Christmas trees and decorations is usually in full swing by now. It takes four to five months to manufacture, package and ship products to the United States. Trump 's 145 per cent tariffs have caused a drastic markup in costs for American companies. Most of the entrepreneurs who have shared their plans with The New York Times have not yet canceled their orders. They hope the president will back away from the tariff brinkmanship. But the alarm in the industry is palpable, with the companies predicting product shortages and higher prices. Some business owners, citing how crucial holiday sales are to their bottom lines, are consulting bankruptcy lawyers. "We have a frozen supply chain that is putting Christmas at risk," said Greg Ahearn , CEO of the Toy Association , a U.S. industry group representing 850 toy manufacturers. "If we don't start production soon, there's a high probability of a toy shortage this holiday season." For America's Christmas industry, Chinese manufacturing is unmatched in its production speed and capability. Toy makers overhaul large portions of their product lines every year to adapt to the changing preferences of children. From materials to machinery, China's factories are one-stop shops for importers. Kara Dyer, founder of Storytime Toys, a maker of children's books with playset puzzles, usually places a big holiday order with her Chinese factory in the first two weeks of April to have enough inventory by mid-July. The Christmas holidays account for about two-thirds of her annual revenue. Dyer placed a small order of USD 30,000 worth of products before the latest tariffs, never expecting they would surge to such high levels. That shipment is en route to the United States. When it arrives, she said, she expects to owe USD 45,000 in tariffs. The shipment will provide the company with enough inventory for a few months, and she said she would probably raise prices at least 20 per cent to cover the tariff costs. But she is waiting to make a big holiday purchase. "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 said. "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 Toy Association survey of 410 toy manufacturers with annual sales of less than USD 100 million, more than 60 per cent said they had canceled orders, and about 50 per cent said they would go out of business within weeks or months if the tariffs remained. At West Side Kids in New York City, the shop's owner, Jennifer Bergman , 58, is concerned that she may not have any toys to sell at Christmas. And the toys she can get her hands on could cost twice what they did last year, which would crimp her sales during the most important time of the year. Toy companies are marking up prices 10 per cent to 20 per cent, said Bergman, whose mother opened the store 43 years ago. She said that she would try to buy as much as she could now, but that the shortages were starting. She had placed a large order of scooters to arrive for the summer. But the importer rerouted the shipment to Canada because it did not want to pay the tariff. She was told that she would get only a portion of her order. If the tariffs remain, Christmas will be like "something we've never experienced before," Bergman said. People will be standing in line to buy things that cost twice or three times as much as before, she said. Her business was already under pressure from competition by Amazon, but she fears that the tariffs will deliver a final blow. "I don't think I will be in business for Christmas," said Bergman, who added that she was consulting a bankruptcy lawyer. Nick Mowbray and his brother, Mat, founded Zuru Group in China, making an assortment of plastic dart "blasters," water balloon accessories and bubble guns that are sold at Walmart and Target. He said retailers were not placing holiday orders. Zuru has cut its marketing budget for the holiday season in half, to USD 60 million, because it expects to be selling fewer products. Mowbray, a native of New Zealand, said everything was in "a holding pattern." If tariffs remain at 145 per cent, he expects prices for consumers to increase from 50 per cent to 100 per cent. "That will be unaffordable for a lot of families," he said. Trump has in recent days struck a conciliatory tone toward China and the tariffs, fueling some hope among business owners that he may exempt industries that do not pose a national security threat. Ahearn said he was in Washington last week to lobby for a 24-month reprieve, which could give companies time to find ways to make their products in the United States. But even if Trump grants importers temporary relief, significant disruptions will occur as companies rush to fulfil orders. Shipping costs are expected to surge, similar to the frenzy during the COVID pandemic, when a shortage of shipping containers led in some cases to a tenfold increase in freight prices. Christmas is the busiest time of year for Aldik Home, a home goods store in Los Angeles. It generates more than two-thirds of its annual sales in the final three months of the year, selling artificial Christmas trees, wreaths, ornaments, lights and other decorations. Larry Gold, the store's owner, said he had worked with a Chinese factory for many years to design Christmas trees. He places the order in January for shipment in June or July. This year, he planned to send seven 40-foot containers from China loaded with USD 600,000 worth of trees. The current tariff would require him to pay nearly USD 1 million at once. "Right now, we've asked them to hold up and wait," Gold, 72, said. Last year, the store sold 7 1/2-foot trees for about USD 1,000. Gold said he would have no choice but to pass on the tariff cost to shoppers, which would put the price of that same tree at more than USD 2,000. He said that price would in effect "kill the product." "I can't believe anybody in this country who is buying trees from China will pay the 145 per cent duty, because they'll never sell them," Gold said. At this rate, he said, he will not bring in the trees, and his store, which has been open for decades, will have nothing to sell during the most crucial period of the year. He said he would probably be forced to close, costing his 40 employees their jobs. "There won't be a Christmas industry here," Gold said. "The product all comes from China."
Yahoo
30-04-2025
- Business
- Yahoo
White House Tariffs Could Ground Santa's Gifts
Christmas isn't looking very jolly even though it's only spring. Holiday toys are often manufactured and shipped four to five months ahead in China and the 145% tariffs are having a negative impact on production, according to The New York Times. 'We have a frozen supply chain that is putting Christmas at risk,' Greg Ahearn, chief executive of the Toy Association, told the media outlet. 'If we don't start production soon, there's a high probability of a toy shortage this holiday season.' With a possible shortage, higher prices will likely follow. The Toy Association is asking the White House for "a 24-month reprieve" to give brands time to figure out the manufacturing process in the U.S. Toys aren't the only issue because Reuters has already reported that 87% of Christmas decorations, and per The Nature Conservatory, almost 90% of artificial Christmas trees come from China. It could be a very expensive holiday for Americans. Playnow Toys & Games store owner Ray Vigneault suggested to Western Mass News that families who have the financial means should shop early this year. 'If your child has a certain thing that they want under the tree, you might want to get that now because it may not be around come the end of the year,' he suggested. As a business owner, Vigneault believes it's the kids who get punished in the end when it comes to the trade war. 'Tariffs on toys. The kids are getting hurt. It's not a good will be huge shortages come Christmas," he explained. "That's totally the prediction right now. There will be some price increases, but the shortages are more worrisome."
