(WKOW) — The United States and China are locked in a trade war, which could impact toy prices next year.
The two countries negotiated in a meeting at the G20 summit in December. It is possible the two countries could strike a deal, however if it doesn’t happen, toy prices could increase.
“Quite simply, tariffs are a tax on consumers,” said Rebecca Mond, Vice President of the U.S. Toy Association.
According to the U.S. Toy Association, nearly 85 percent of toys sold in the U.S. are made at Chinese factories.
Currently, U.S. toy companies already have to pay more to buy Chinese products, after the Trump Administration hit China with 200 billion dollars in tariffs. Recently, they’ve threatened to add even more taxes to Chinese goods. So far, toys haven’t been a part of those goods but if the trade war continues, they’ll become collateral damage.
“If tariffs were to go into effect on toys sold in the U.S. that would be devastating, particularly for small companies,” Mond said.
The only way toys can avoid these tariffs, is if the U.S. imports toys from somewhere other than China. But experts said that probably won’t happen. Chinese factories are special because they’re able to handle the demand for toys in the U.S.
Companies are expected to keep buying Chinese products even if tariffs make them more expensive. The extra cost will likely get passed on to the consumer.
“Imagine this,” said Wang Xiaojun, General manager of Zhejiang Morning Crafts in China. “They need to spend just 150 or 200 dollars on what used to cost just 100 dollars. It is going to be tough, especially for medium and low income Americans.”
“Trump’s policy was meant for helping the American people, but it’s a double edged sword. It hit China, but it’s also going to hurt American wallets,” Xiaojun said.
Unless both countries can come to an agreement, consumers should expect shell more for toys soon.