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Grandview-based toy company prepares to raise prices due to recent China tariff

Posted at 5:43 PM, May 10, 2019
and last updated 2019-05-10 22:08:59-04

GRANDVIEW, Mo. — A new round of tariffs against China announced this week could eventually cost the average family of four an extra $760, according to a report by trade partnership.

The price for clothes, electronics, even toys are expected to go up.

Some companies, such as Grandview-based U.S. Toy, were able to absorb costs linked to the first tariff against China.

The ability to absorb this week's hike might tie their hands.

"Twenty-five percent is a lot to do in one year," U.S. Toy CEO and Owner Seth Freiden said.

A majority of the items distributed and sold by U.S. Toy are made in China.

"During the process they produce the items, they mix all of our different items into one container," Freiden said. "The container will leave China head on an overseas container ship, land in California typically Long Beach, it’ll be put on rail, get rail to the intermodal and from the intermodal they’ll put it on a flatbed."

Eventually, it's brought to their nearly 600,000 square-foot warehouse where the products are stored until they're sold under one of company's three divisions.

Freiden, a third generation owner, said U.S. Toy absorbed the first round of tariff's imposed by the Trump administration.

"But with this 25 percent, it’s across all items," he said. "Before it was limited to paper goods and certain categories of items. Now, it's spread across every item, so we will have to reevaluate our needs and our margins and be able to support our business."

The recent tariff doesn't impact Chinese-made products in transit or those already in the United States.

"This won’t actually have an impact for us because there will be a little bit of a lag before we actually feel this," Freiden said. "It’s not going to be tomorrow when we wake up where we all of sudden have to wake up and change our prices."

But Freiden's company is already looking at ways to adapt.

"Do we source from other countries now? Do we look at Thailand more? Do we look at Vietnam more? Do we look at other countries that don’t have a 25 percent duty?" Freiden said.

Freiden, who employs a staff of 150 local workers, has a message for those in Washington D.C.

"Before they go out and start a fight with China, this is affecting the world," he said. "They should put a little bit more thought into what they’re trying to accomplish and who it really does impact, cause there will be an impact."

He added unless there's some kind of reversal, his prices will go up at the beginning of the new year.