Amidst the tense situation in US-China trade relations and the uncertainty surrounding high tariff policies, different industries are responding in various ways. Many clothing products are sourced from multiple countries, ensuring an ample supply. Some Chinese businesses have even stockpiled large inventories, enough to last one to two years. However, the situation in the popular toy market is quite different. To meet demands promptly, some businesses have resorted to air freight to replenish their stocks, facing cost pressures. Businesses express hope for the tariff negotiations between the US and China scheduled to take place in Switzerland this weekend.
Operating low-end clothing businesses in Chinatown for two to three decades, Mr. Su mentioned that he originally had a store on Canal Street but moved near the subway entrance in the past five years. He believes that post-pandemic years are not the same as before. Despite the high tariffs between China and the US, he is more concerned about public safety and consumer purchasing power.
“Tariffs are a national policy, and as long as everyone gets used to it, it’s fine,” said Mr. Su. “The cost of goods determines the selling price. If my goods become expensive due to imports, I will sell them at a higher price. But the concern is that the wages of the common people are limited; if you sell at a high price… it’s just like going to the supermarket; you can’t buy much with a hundred dollars nowadays.”
“In the past, earning fifty cents from a one-dollar item, now it’s still the same. But the more expensive the item, the better our business. Buying an item for fifteen dollars and selling it for thirty dollars means earning fifteen dollars, just like that. How many customers do you need to make fifteen dollars from selling a one-dollar item?”
He adds, “Most Chinese people come to America for business, and safety is the most important. Without safety, no matter how much you earn, it’s useless; you’ll still be scared to go out.”
When asked about his current worries, he said, “Nothing much; just take it one step at a time, look forward, not backward.” “Over the past few years since the pandemic, to be honest, no one has much money.”
However, he remains confident in his inventory, stating, “We have plenty of inventory; selling for a year won’t be a problem.”
At the Chinese clothing store “Mei Bao Fashion” in Flushing, the owner instructed the staff to open bags of black bags to clear out all clothes regardless of the season, offering a 70% discount on the marked prices.
Miss Zhang, an employee, mentioned that the owner aims to clear out inventory quickly and accelerate turnover, “Now is the cheapest time of the year; I also took the opportunity to save a few down jackets for myself.”
Another Chinese store located next to the Roosevelt Avenue subway entrance in Queens also reported having sufficient inventory. When some customers expressed concern about not being able to buy cheap and fitting Chinese-made clothes in the future, the owner reassured them saying, “We’re not worried at all; I have hundreds of thousands of dollars worth of goods here, enough to sell for the next two years.”
Reporters observed that the popular clothing chain store “Marshalls,” frequently visited by Chinese people, has a wide range of products available at affordable prices. At the checkout counters of another large chain supermarket, Walmart, one can also find “low prices” signs and a large selection of daily necessities.
Mr. Li, who hails from a coastal city in Shandong, China, and has been in the foreign trade business for over ten years, mentioned that he now primarily purchases Nike sports shoes in the US, most of which are manufactured in Vietnam. Data shows that Vietnam supplies about 50% of Nike’s products. He recalled that his former company’s overseas clients were unwilling to accept increased prices locally. Since 2005, they gradually shifted clothing orders to countries like Vietnam and Cambodia because although the quality was not as good as China, the prices were more acceptable due to the high costs in China.
One of his friends who was originally in apparel accessories trade had immigrated to Brazil eight or nine years ago. Currently, they import fabrics directly from China and process them into clothing locally.
In comparison to the diverse import sources in the clothing industry, the US toy industry is significantly more dependent on China. The US toy market is valued at $42 billion, with about 80% coming from China. According to S&P Global, China exported approximately 79% of toys to the US and European markets in the first seven months of 2023. Although there have been investments in setting up factories in India, Vietnam, Mexico, among other countries, the relocation of toy manufacturing has been slow.
The toy store at the Tianjing Center in Flushing is facing difficulties in procurement. Revealing that to avoid affecting customers, they are still absorbing the increased costs despite rising procurement prices.
Mrs. Liu, who operates a toy store with her family, specializing in idol plush toys, noted a significant cost increase recently, with each item costing an additional $2. She found it more cost-effective to directly import from China since US wholesalers add an extra layer of cost. Therefore, she stocked up on a batch of goods via air freight as inventory before the tariff change came into effect on May 2.
These toys are popular among consumers of all ages. She said, “They are the stars.” This includes Blue Kapi Pala-shaped plush dolls, pink Turbo, and classic characters like Hello Kitty, Pikachu, and Winnie the Pooh, among others. On that day, a stylishly dressed Chinese woman bought a slightly larger plush toy.
Mrs. Liu pointed out that many children become “addicted” to plush toys because each character has its story behind, serving as a comforting toy for them.
Regarding whether the market will fluctuate due to tariffs, Mrs. Liu mentioned that “the impact is not significant for now.” She noted that she has not imported any of the new items subject to the 145% tariff but will observe changes with the next batch of goods. Currently, the shipping quotes from China include the tariff costs, but she received messages asking, “What if it is charged an extra $200?” She has paused importing since after May 2nd and is eagerly awaiting the tariff negotiations between the US and China happening this weekend.
Lastly, she quoted a recent statement from President Trump, saying, “An American girl only needs three or four doll toys; she doesn’t need thirty.”