A recent agreement between the US and China aims to reduce tariffs on approximately $60 billion worth of products, including toys like dolls and puzzles, sparking hope within the toy industry for a positive shift this holiday season.
The White House revealed on Sunday that toys were part of 77 categories benefiting from this tariff relief, a welcomed change for sellers who have faced challenges due to inflation and rising prices.
“Toys are often sensitive to price changes for American families,” stated Kathrin Belliveau, the Toy Association’s chief policy officer, in an opinion piece last week. “When prices go up, families must make tough decisions about their purchases.”
This tariff reduction follows Chinese President Xi Jinping’s state visit last week, potentially eliminating the existing 20% tariff that toymakers face when importing from China. Details on the specific products affected are still pending.
Given that over 80% of toys sold in the US are produced in China—yes, even Lincoln Logs, which relocated to China after the closing of its Maine facility—manufacturers are anticipating a significant impact.
Many toy manufacturers are keen to take advantage of this policy change before the holiday season. According to Jay Foreman, CEO of Basic Fun, many importers have been delaying shipments due to ongoing shifts in tariff regulations.
The industry has also been struggling with rising diesel fuel prices amid the conflict in Iran, which has led to surcharges of $600 per shipping container for some importers. Foreman, whose company produces Care Bears and Tonka Trucks, mentioned that diesel is essential for factory operations, transport, and even in the shipping industry.
“The increase in diesel costs and other inflationary pressures are complicating our efforts to lower expenses,” he noted.
Despite these challenges, toy sales surged by 17% in the first half of the year compared to last year, primarily driven by adult collectors.
As part of the agreement, the US and China will collaborate to establish lists of imported goods, with each country focusing on $30 billion worth of items.
China submitted a list naming over 1,600 US products eligible for tariff relief, which includes agricultural goods, medical equipment, and surgical robots.
However, Sara Albrecht, CEO of the Liberty Justice Center, which successfully challenged part of the previous tariffs this year, expressed caution. “The announcement puts products on the negotiating table, but it doesn’t remove tariffs from the official books,” she explained.
Albrecht added that there remains uncertainty around which duties will change, the new rates, or when reductions will actually start.
The Toy Association, which has pushed for these tariff reductions, chose not to comment while awaiting more details about the policy changes.
At this time, the White House has not provided any timeline for when the adjustments to the China tariff policy will be finalized.
