Natasha Khan

we're seeing is that this decision of how much or whether to jack up the prices is really as much of an art as it is science. So if you pass along the tariff costs entirely to the customer, you might risk turning them off for periods that could last far beyond this moment. But at the same time, if they swallow the tariffs themselves, they could destroy profits.

For example, executives at a toy maker called Zuru told us that they're examining every item. I think they have about a thousand items that they import to find a new price point. For some items, it might be more competitive. And if they do raise the price, it may really lose market share to other companies. For others, there's things to consider like consumer psychology.

So numbers like $9.99, $19.99 or $49.99 are what people call strategic price barriers. So these are thresholds where if they cross it, consumers are more sensitive and might just make the decision not to buy.

Across the board, we have seen that there are a lot of prices that are still holding steady. The consumer products company, Kimberly Clark, was saying that they're not really planning to raise prices. People are very concerned about value. They're concerned about pricing. So that's something that companies are really having to make decisions about that balance.

Especially for smaller companies, that's where it really becomes very complicated because they might not have as much cash flow or cash reserves to suddenly pay such a big cost. So I think that's really something that people are really grappling with.

Thank you.

For a lot of Chinese manufacturers that mainly export to the U.S. and for American businesses that heavily rely on Chinese imports into this country, it really has been a chaotic time. As we report this week, there's scenes across China of factories stopping work, of supplies stuck in factories or stuck at ports.

In one example, we have one person who tried to offload shipment of clothing like by live streaming at the port just to get rid of some of the stock that now has nowhere to go. Now, in the States, we've also spoken to importers that once they learned of the 145% tariff, basically have stopped or canceled or paused orders.

It really has been a trying time for many people that have built their livelihoods on this U.S.-China supply chain.

We dug into some of the data and China is the source of 74% of imported toys and games in the U.S. and 87% of Christmas decorations, not including candles and natural Christmas trees. And almost all of the U.S. fireworks are imported from China. So Hasbro, for example, really mentioning that they're having a lot of different talks with retailers. Half of their U.S.

toys and games are made in China. Obviously, it takes time to shift your supply chain. There's definitely been lots more efforts to try to see where they can quickly move the supply chains, either locally. in the short term or maybe for the long term to other jurisdictions. But it isn't something that they can do overnight. If they do find an alternative, it might not be fast enough.

Or maybe there's no capacity because everybody is competing for the same manufacturers in other countries.

For a lot of Chinese manufacturers that mainly export to the U.S. and for American businesses that heavily rely on Chinese imports into this country... It really has been a chaotic time.

In the last few weeks, actually, is a time in which retailers typically place their orders for the fall or for the holidays at the end of the year. And typically, this manufacturer sells to an American toy maker here. And that American toy maker would sell to QVC for their holiday programming. Now, QVC froze the shipment after the tariffs were announced.

That's what we're seeing, not just in the snowman sector, but in a lot of other industries that rely on Chinese-made goods.

Thank you.

Well, we're seeing this tariff surcharge come up in a variety of companies selling things to consumer, you know, from bathroom fixture makers to toy shops, especially companies that make a lot of their products in China, they're really starting to tack tariff surcharges onto invoices as a separate line item.

They want to be as transparent as they can with their customers about why there's suddenly a price differential between a product they might have been buying for some time or how they plan to attribute that tariff charge. One example we'll have is Jolie, which sells high-end filtered showerheads.

Jolie's chief executive, Ryan Babenzine, told us that they haven't raised prices yet, but they are considering a price hike later in the year, depending on the situation. And he told us that the uncertainty is making consumers pull back on discretionary spending.

Babazine told us that in anticipation of these tariffs, the company had been stocking up on inventory as much as they can before this latest announcement. Alexandra Fine is the chief executive of Dame, which is a sexual health company which markets vibrators made in southern China. Her company has already added what it calls a Trump tariff surcharge.

Fine was telling us that the flat fee actually doesn't cover the full cost of what The tariffs have added to her cost of doing business, but that she felt that it was better than pretending that everything was normal.

Everyday consumers don't understand how the tariffs are going to impact them. And they don't necessarily understand how and why businesses manufacture in the places they do and what it could look like elsewhere. And we thought this would be a good opportunity to educate consumers. and kind of just let people know that this is the policy that is impacting our price.

In previous years, perhaps companies might have absorbed that cost or just sort of raised the price of the products. And so that's really something that is a little bit different about the situation is that they're specifically calling it out.

Yes, definitely. One of the companies that we mentioned in our story, which is a toy store in Wisconsin, laid out all of these extra charges to their customers in an email soon after the latest tariff rate was announced and expressing sentiment of really regret that there has to be an increase in prices, but also promising that

as the tariff rates adjust or perhaps get removed in the future, that they would accordingly also adjust that tariff surcharge. This is slightly different from a strategy of raising prices across the board. If they use this strategy of having a tariff surcharge, the price could be more dynamic as the situation changes.