It may be several months away, but Christmas is all ready at risk.
In early April, the White House increased tariffs on China to tariffs 145%. The tariffs have had a wide range of effects on business in America. Their latest victim? Toy stores.
The New York Times reported China manufactures 80% of toys sold in the U.S. And CNBC reported that imports from China make up 45% of traffic at the Port of Los Angeles.
This all has left small businesses like Kip’s Toyland, the oldest toy store in Los Angeles according to their website, in a difficult position. Owner, Don Kipper said they’ll have to decide whether or not to pass on higher prices to consumers.
“We can choose to have either a smaller profit margin when we buy those things, or lose money and keep our prices the same, or adjust our prices,” Kipper said. “I don’t want to say raise our prices, but adjust our prices to reflect this chain of events that none of us have instigated.”
Kipper is concerned that raising their prices will impact families celebrating Christmas and birthdays.
“We have to recognize that Johnny and Susie are still going to have birthdays coming up,” Kipper said. “There’s still going to be a Christmas where moms and dads are going to want to buy toys for their kids.”
Earlier today, President Donald Trump dismissed the impact of the tariffs on toy manufacturers when asked about them during a cabinet meeting.
“Maybe the children will have two dolls instead of 30 dolls,” Trump said. “Maybe the two dolls will cost a couple of bucks more than they would normally.”
Kipper said they normally start ordering toys for the holiday season in the summer, but even that is starting to change.
“Usually around July 1 is when we start buying,” Kipper said. ”But usually doesn’t matter anymore, because nothing is usual or normal. So we’re going to have to adjust that.”
Despite the situation, Kipper said suppliers have tried their best to work with business owners.
“If you have any questions, don’t hesitate to give us a call and you can cry on our shoulders,” Kipper said. “And this is one of several such emails that we’ve received from our suppliers.”
Toy stores have already been struggling to compete against big box stores and online retailers, and this is only making matters worse.
“The risk is, if you don’t try to remain competitive and adjust your prices to reflect the increased costs that you’re incurring, you’re going to go out of business,” Kipper said. “You see it happening all over the place, not just with retail stores, but restaurants and all kinds of mom and pop little organizations, they’re getting clobbered.”
The global tariff war with China continues, but Kipper and other stores are trying to save Christmas in their neighborhoods.