Chinese factories are normally at their busiest during the third quarter, cranking out production of everything from Barbie dolls to miniature trucks in time to ship them over the ocean to the U.S. ahead of the all-important holiday shopping season. This year’s different.
Even with President Donald Trump delaying tariffs on $160 billion of toys to smartphones to spare the Christmas boom for U.S. retailers, the damage has already been done. That’s because big toy purveyors like Walmart Inc. have already piled up inventory given the uncertainty over how the trade war will pan out, according to industry officials.
“We will be among those bearing the brunt,” said Justin Yu, a foreign trade manager at Pinghu Mijia Child Product Co., a maker of toy cars and kids’ scooters in Zhejiang, China. “The influence is definitively huge.”
Yu now plans to find new customers in Europe, Middle East and Africa to make up for the U.S. shortfall. The company is considering reducing North America’s significance to its revenue to avoid future tariff hits. Yu said he currently sends $25 million of goods a year to U.S. retailers including Target Corp. and Walmart.
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