All about the community of model railroading and rail enthusiasm
August 14, 2019
Some toys and scale models got a temporary reprieve Tuesday from tariffs to be imposed on goods from China arriving on U.S. shores beginning Sept. 1.
The United States Trade Representative delayed imposing 10 percent tariffs on some Chinese imports until Dec. 15. The announcement came a few days after two major model railroad manufacturers said they were raising prices for products currently on the water due to arrive Sept. 1 or later.
The Trump administration, responding to fears that deteriorating trade relations with China are hurting the economy, delayed a 10 percent tariff on only a portion of $300 billion in goods earmarked in May. USTR said that certain products were being removed from the list based on health, safety, national security and other factors. Among them are toys, including riding toys other than bicycles, puzzles and reduced-scale models.
Other items on the list are cellphones, laptop computers, video game consoles, computer monitors and certain items of footwear and clothing that typical are on holiday shopping lists.
The administration says it still plans to impose tariffs on thousands of other Chinese imports under the Sept. 1 deadline.
With a few hours after the news, The Toy Association, a nonprofit that represents the toy and game industry, applauded the administration for pushing back the tariff. The action saves Christmas, says Steve Pasierb, TTA’s president and CEO.
“We appreciate leaders in the administration listening, and we hope through the tariff exclusion process the administration will provide further relief to the toy industry by eliminating all toys and toy-related components from these latest tariff lists,” he said in a statement. “While we continue to support the goal of restructuring the U.S.-China trade relationship, tariffs are the wrong approach.”
TTA has lobbied Capitol Hill and the administration to abolish taxing toys from China. The association is an active member of the Americans for Free Trade coalition and has an education campaign focused on the impacts of tariffs.
“We will continue to advocate with the administration for solutions that can address the very real trade, intellectual property and business issues our nation has with China while not placing the burden upon America’s toymakers, retailers and children,” Pasierb said. “Toys are a source of childhood joy and a myriad of developmental benefits, not a tool in a trade war.”
Immediately after the announcement Wall Street rebounded from a downturn earlier in the week as the deadline approached. A two-day skid for the S&P 500 was halted and the Dow Jones Industrial Average jumped 1.4 percent. The Nasdaq was up nearly 2 percent.
In days leading up to the announcement, economists, citing the trade dispute, had downgraded the economy and projected increased chances of a recession in 2020. Bank of America Merrill Lynch upped its forecast for a downturn next year from 20 percent to 33 percent.
Model manufacturers began bracing for tariffs and last week announced price increases on products to offset them based on a Sept. 1 start.
Broadway Limited and ScaleTrains.com said they were raising prices for models imported from China on shipments received after the end of August. Broadway Limited said it would raise prices by 7 percent, retroactively, on its HO-scale Pennsylvania Railroad T1, Baldwin Sharknose, GG1, EMD F3 and Streamlined Pennsylvania K4 locomotives.
ScaleTrains.com said that the ship carrying its release of HO-scale Operator and Rivet Counter Dash-9 locomotives is scheduled to dock Sept. 2 and prices would be adjusted to offset “tens of thousands of dollars to U.S. Customs and Border Protection for the value of the Dash-9 shipment.”
Prices were being raised $5-$10. ScaleTrains.com estimated that the tariffs, had they been imposed starting Sept. 1, would cost the company nearly $100,000 this year and more than $200,000 in 2020.
