1 week Ago By Associated Press
WASHINGTON — Rick Woldenberg thought he had come up with a sure-fire plan to protect his Chicago-area educational toy company from President Donald Trump’s massive new taxes on Chinese imports. “When he announced a 20 percent tariff, I made a plan to survive 40 percent, and I thought I was being very clever,” said Woldenberg, CEO of Learning Resources, a third-generation family business that has been manufacturing in China for four decades. “I had worked out that for a very modest price increase, we could withstand 40 percent tariffs, which was an unthinkable increase in costs.
” His worst-case scenario wasn’t bad enough. Not even close. The American president quickly upped the ante with China, raising the levy to 54 percent to offset what he said were China’s unfair trade practices.
Then, enraged when China retaliated with tariffs of its own, he upped the levies to a staggering 145 percent. Woldenberg reckons that will push Learning Resource’s tariff bill from $2.3 million last year to $100.
2 million in 2025. “I wish I had $100 million,” he said. “Honest to God, no exaggeration: It feels like the end of days.
” ‘Addicted’ to cheap goods It might at least be the end of an era of inexpensive consumer goods in America. For four decades, and especially since China joined the World Trade Organization in 2001, Americans have relied on Chinese factories for everything from smartphones to Christmas ornaments. As tensions between the world’s two biggest economies — and geopolitical rivals — have risen over the past decade, Mexico and Canada have supplanted China as America’s top source of imported goods and services.
But China is still No. 3 — and second behind Mexico in goods alone — and continues to dominate in many categories. China produces 97 percent of America’s imported baby carriages, 96 percent of its artificial flowers and umbrellas, 95 percent of its fireworks, 93 percent of its children’s coloring books and 90 percent of its combs, according to a report from the Macquarie investment bank.
Over the years, U.S. companies have set up supply chains that depend on thousands of Chinese factories.
Low tariffs greased the system. As recently as January 2018, U.S.
tariffs on China averaged just over 3 percent, according to Chad Bown of the Peterson Institute for International Economics. “American consumers created China,” said Joe Jurken, founder of the ABC Group in Milwaukee, which helps U.S.
businesses manage supply chains in Asia. “American buyers, the consumers, got addicted to cheap pricing. And the brands and the retailers got addicted to the ease of buying from China.
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