The latest round of tariffs expected to hit Chinese imports will take effect in just a few weeks, and President Donald Trump’s announcement isn’t sitting well with local businesses that are readying to deal with higher costs.
Those costs are set to rise at an inopportune time for local merchants, who say they are already beginning their preparations for the holiday shopping season.
“When you’re given no opportunity to plan, it risks disaster,” Rick Woldenberg, CEO of Learning Resources, says.
Woldenberg’s Vernon Hills-based company has been producing educational toys for 100 years, employing hundreds of workers and signing contracts with companies all around the world.
The company says it finds itself an “innocent victim” of President Trump’s trade war with China, saying it manufactures many of its products overseas.
“We make about 70 to 80 percent of our products in China,” Woldenberg says. “(We have) millions of dollars of merchandise coming over.”
Last week, President Trump announced a new round of tariffs on Chinese imports, which will take effect by Sept. 1. Woldenberg says that increase in tariffs could impact his company’s pricing, driving up costs of items between 10 and 25 percent, or potentially even more.
“It’s hard to imagine anyone can eat the entire cost,” he said. “We’ve already been impacted by tariffs to date.”
Phil Levy, chief economist for Flexport, a company that handles global freight and trade, says that the president’s tariffs could potentially do more harm than good.
“I think the president probably hoped with the threat they would give in. They haven’t,” he says. “We absolutely do not have to be using tariffs the way we are. It’s a choice. It’s an attempt to try to pressure the Chinese to change.”
With the big new tariffs, imposed at a rate of 10 percent on $300 billion worth of Chinese imports, local companies are experiencing heavy consequences in one of the most competitive retail markets in the world.
“People who make educational products deserve support too,” Woldenberg said. “None of us feel the livings we earn to pay our mortgages and retirement funds are unimportant.”