As toy inventors, toy manufacturers and buyers for stores that sell toys met for a four-day annual trade show in New York last weekend, a topic besides which items were destined for holiday wish lists permeated the displays. President Donald Trump had announced days before that he planned to increase the extra tariff he put on Chinese imports in February to 20%. Would he? By Tuesday, the last day of the Toy Fair, attendees had their answer, and the talk about how it would affect the prices of playthings grew more urgent. Nearly 80% of the toys sold in the U.S. are sourced from China, according to The Toy Association, a national industry group that sponsors the show formerly known as the North American International Toy Fair. Many toy makers are now renegotiating prices with retailers and taking a hard look at their products to see if they can cut costs. Greg Ahearn, president and CEO of The Toy Association, said price increases of 15% to 20% are expected on games, dolls, cars and other toys by the back-to-school shopping season. The price range that U.S. consumers are willing to pay is anywhere from $4.99 to $19.99, leaving little wiggle room to raise prices, he said. “It’s untenable,” Ahearn said, noting that small businesses make up roughly 96% of the American toy industry. Trump also moved forward this week with 25% tariffs on products imported from Canada and Mexico. Some companies have moved some of their manufacturing to Mexico to be closer to the U.S. On Wednesday, though, the president granted U.S. automakers a one-month exemption from the tariffs on the neighboring North American nations. Trump’s changing statements and policies on tariffs have made it challenging for toy companies to plan accordingly. Basic Fun CEO Jay Foreman said he didn’t rush late last year to get shipments of Tonka trucks, Care Bears and other toys his Boca Raton, Florida-based company produces in China because he wasn’t sure if the 60% tariff on Chinese goods that Trump discussed on the campaign trail would come to pass. “If you plan in a chaotic environment, you have a much greater chance of being wrong than being right,” Foreman said when interviewed Sunday at his Toy Fair booth. All of Basic Fun’s toy products are made in China except for K’Nex, a construction set made in the U.S., he said. After Trump instead imposed an additional 10% tariff on Chinese goods last month, Foreman said he worked hard to persuade retailers to share some of the cost so he didn’t have to pass it on to consumers. Now that the import duty has doubled, he said he will have to raise prices for many of his items. For example, a Tonka Classic Steel Mighty Dump Truck, which now retails for $29.99, will likely go up to $39.99 as early as the fall, Foreman said. The Toy Association lobbied hard to exempt the toy industry from the 10-25% tariffs Trump levied on Chinese goods during his first term. The group lobbied again this time around, trying to educate members of Congress that toy companies can’t replicate the expertise found in Chinese factories. Ahearn noted there’s a lot of sophistication of manufacturing and craftsmanship that has been built up over time over generations in China. he […]