Grandview toy company prepares for trade war's increased costs

May 17, 2019 - 7:28 am

U.S. Toy Company in Grandview toy company not ready to pass on the cost of tariffs, at least for the time being.

A new round of tariffs against China was announced last week. President Donald Trump increased tariffs on $200 billion worth of Chinese imports to 25 percent, up from the previous 10 percent.

Seth Freiden, U.S. Toy's third-generation owner and CEO, plans on keeping the company's 600,000 square foot warehouse stock with their best-selling items.

"We keep a very robust in-stock position," Freiden said. "We're not hand-to-mouth, waiting for inventory all the time. The tariffs, when they go into effect, it's on new shipments that are coming, so we'll be affected on our next round of ordering."

Walmart says higher China tariffs will increase prices for U.S. shoppers

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U.S. Toy is able to absorb the portion of the tariffs that affect paper goods, but the fourth grouping of import taxes on plastics will create a larger hit to the bottom line.

"When it goes to 25 percent it's a different ballgame, so we have to readjust," Freiden said. "We have inventory now, so we're not panicking. We're looking for other sources, we're resourcing from other countries, we're exploring other options."

China remains the cheapest option for manufacturing toys, even with a 25 percent tariff. Company officials plan to reevaluate costs in October before they assemble their 2020 product catalog.

Any large increases in costs are bound to be passed on to consumers, Freiden said.

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