Not a lot of fancy pictures and pre-order links in this post. This post is all about boring old politics.
The news came from Yahoo! Finance last night. Yes, Yahoo! still exists.
Starting last Monday, June 24, 2019, the office of the United States Trade Representative hosted hundreds of companies lobbying the Trump administration to forego the next planned round of tariffs proposed to be “25% tariffs on $300 billion worth of imports from China, which Citi analysts say will affect nearly 70% of consumer goods.“
Hasbro’s Chief Operating Officer, John Frascotti, is scheduled to testify on Monday. In remarks Hasbro submitted in advance of his testimony, the company argued that these planned tariffs could not come at a worse time for consumers and toy companies alike.
“This could not come at a worse time for our industry. We, and the U.S. toy industry overall, are facing serious headwinds from the recent bankruptcies of two major toy retailers, K-Mart and Toys ‘R’ Us, which have already put an estimated 30,000 U.S. jobs at risk,”Kathrin Belliveau, senior vice president at Hasbro,
Belliveau argues that the tariffs could increase the pressure on an already strained industry and cause loss of American jobs.
Mattel echoed Hasbro’s sentiment in their statements submitted to the USTR:
“Although unskilled production operations typically occur in China, the U.S. toy, game and juvenile products industry maintains major product design, marketing and other key operations in the United States that would be negatively affected by tariffs on these product, “Corinne Murat, Mattel’s director of government affairs
Although the industry is in the process of diversifying its manufacturing sources, that process is not anywhere close enough to complete to allow the industry to weather another waive of tariffs.
“Hasbro says it has been trying to diversify its supply chain since 2012. At that time, it says 80% of the products sold in the U.S. came from China. In 2018, that number dropped to 67% and the company’s goal is to reach 60% by the end of 2020.”Yahoo! Finance
The toy industry also argued that consumer safety was at issue. Increased cost of production for legitimate U.S. toy companies adhering to strict U.S. product safety regulations could lead to consumers seeking out lower cost knockoffs that don’t adhere to such standards.
More later, I’m sure.