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Minnesota toy businesses brace for impact as tariffs threaten toy industry

Minnesota toy businesses brace for impact as tariffs threaten toy industry
Minnesota toy businesses brace for impact as tariffs threaten toy industry 02:44

ST. PAUL, Minn. — The White House confirmed a 30-day pause for 25% tariffs on goods from Mexico and Canada Monday following calls between President Trump and the leaders of both nations. 

In exchange, those leaders pledged to increase security at the northern and southern borders. 

While this news may provide some relief for businesses at the border, Minnesota-based companies are sounding the alarm over another looming tariff: a proposed 10% tariff on all goods imported from China. 

According to the Toy Association, an industry group, nearly 80% of U.S. toys are manufactured in China. The tariff proposal is raising concerns for small businesses that rely on these imports, especially toy retailers like Mischief Toy Store in St. Paul.

"We're going to suffer as a small business, but so is everyone in this country," said Dan Marshall, co-owner of the family-run store, which has been in business for over 25 years. Marshall noted there are few toy manufacturers left in the U.S., and the proposed tariffs could have significant effects.

 "If we have to raise prices, we will. But obviously, we're trying to bring in products now, earlier in the year so we don't have to do that, but we have no idea and that's part of the problem," he said.

The uncertainty surrounding the tariffs is rippling through the supply chain, impacting companies such as Atlas Games, a Duluth-based game publisher. President John Nephew said Atlas Games places printing orders months in advance, and the tariffs have forced them to reconsider their strategy, even exploring the possibility of moving some operations outside the U.S. 

"It incentivizes us to just keep them out of the United States entirely, to avoid dealing with the hassles and the uncertainties and the cost," Nephew said.

The potential tariffs are also raising concerns about consumer safety. The Toy Association has warned that, should prices rise, families might opt for cheaper alternatives, which could lead to the purchase of knock-off toys that have not been tested for safety. 

"We want to make sure American kids continue to experience the immeasurable benefits of play, while having fun and staying safe. We hope that as negotiations continue to unfold, toys will be exempted from any potential tariffs," the group said in a statement. 

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