New tariffs on Chinese imports would sink US small toy companies, disrupt holiday season

A 'less affordable' holiday season

Many toy companies started their planning for the upcoming holiday season last fall, said Grubba, and everything from product lines to pricing is already set.

"We have product that's pre-sold. We've already settled the amount of money. And it's to be delivered in the second half of this year," he said, lamenting the uncertainty emanating from the tariffs has "thrown everything up in the air."

The proposed tariffs on Chinese imports will also seriously disrupt this year's upcoming holiday season, which accounts for 50 percent of annual toy sales, according to Rebecca Mond, vice president of federal government affairs for the Toy Association.

The price of toys could go up by 15 percent and as many as 68,000 out of the more than 691,000 employees in the industry could lose their jobs, Mond told local media, citing a recent study.

"Most people that I talk to don't want to go back to that (recession). We want to have prosperity and stable times and peace and back to normal trade," he said.

US retailers also sound the alarm: the upcoming holiday season celebrations would be "less affordable" for Americans should the new tariffs on Chinese goods are put in place.

The tariffs will eventually increase the cost of celebrating Christmas and "disproportionally impact" American families, Douglas Lauer, president and CEO of San Francisco-based ornament store Old World Christmas, said at the public hearings while testifying before the Section 301 Committee under the Office of the US Trade Representative on Friday.

The week-long hearings which will last till June 25 have witnessed hundreds of industries leaders opposing the proposed additional tariffs on Chinese imports.

The average US family spends under 60 dollars per consumer on holiday decorations annually, said a survey from the National Retail Federation.

For Thomas Harman, founder and CEO of privately-held Balsam Brands, the company's products of concern are pre-lit artificial Christmas trees, which require labor-intensive production and are "almost exclusively made in China."

More than 95 million US households display a Christmas tree, and four out of five do so with an artificial Christmas tree, according to Harman.

"We consistently hear from our customers that holiday budgets are tight, and we expect that trend to continue in 2019," Heather Shepardson, CEO of seasonal and holiday company Rauch Industries, Inc., said in her testimony.

About three quarters of imported glass Christmas ornaments come from China, Shepardson said. "No other country has the capacity to manufacture the broad array of ornaments currently made in China and certainly not at the price points that most Americans can and are willing to accept."

A tariff up to 25 percent is "unfathomable for me and my colleagues in our industry," Shepardson added.