China-US Trade Frictions: Made-in-China toys in US could face tariffs

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The holiday shopping season is stressful under normal circumstances, but in the US the toy industry is facing another worry: the threat of tariffs. Toys made in China are currently exempt from US tariffs. That could change. If it does, consumers can expect to pay more. CGTN's Karina Huber reports.

The shopping season is on in America as the countdown to Christmas looms. On many family's lists: toys. Americans spend roughly 500 dollars on toys, per child, every year. The majority are made in China.

RICHARD GOTTLIEB, CEO GLOBAL TOY EXPERTS "China is roughly 86% of the world's toy manufacturing, so it's huge. And there really is no other country that could take it on."

Gottlieb says that's because China's manufacturing infrastructure is unparalleled in terms of efficiency and speed.

Finished toy products are not on Trump's tariff list, but some products like lithium batteries and the chemicals used in toys like Silly Putty are. Prices won't be affected this holiday season. Retailers placed their orders before the tariffs were implemented, but prices could still go up in 2019.

The bigger fear in the industry is that toys will end up on the list of tariffs. That would surely happen if the Trump administration follows through with its threat to impose a third round of tariffs on a further 267 billion dollars-worth of Chinese goods.

JIM SILVER, CEO TOYS, TOTS, PETS & MORE "If there is a tariff on toys, it will be a big problem. It will increase costs and consumers will wind up paying for it."

Silver says toy brands are hoping for the best but preparing for the worst. Some are looking into shipping production out of China, but he says doing that wouldn't come easily or quickly. In the meantime, manufacturers, retailers and consumers would likely feel the pinch.

"If you look at something that goes from $3.99 to $4.49, you'll most likely pay for it. But if you see something that goes from $39.99 to $49.99, that's a big difference and you can lose toy sales."

2018 has been a bumpy one for the toy industry. In March, global toy chain Toys R'Us announced it was going out of business. Now tariffs may be on the horizon. Nevertheless, Gottlieb says many toymakers remain hopeful.

"I'd say right now, we're at a 6.5 out of ten in terms of confidence."

KARINA HUBER NEW YORK "For those who tend to be more pessimistic, they might consider stocking up on toys now in case prices rise in 2019. Karina Huber, CGTN, New York."