MICHEL MARTIN, HOST:
So how are businesses adjusting to these dramatic swings in President Trump's tariffs? I'm going to ask Jay Foreman. He's the CEO of Basic Fun! The company sells classic toys like Care Bears, Tonka trucks and Lincoln Logs, about 80% of which are made in China. When we last spoke, he told us that Trump's tariffs had caused him to freeze new shipments because the 145% tariffs would basically double the retail price of most of his toys. And he's back with us. Jay, good morning. Thanks for joining us.
JAY FOREMAN: Good morning, and good to be here.
MARTIN: So you got the news that Trump was going to cut the tariff back to 30% from 145%. What did you do?
FOREMAN: Well, it was about 4:30 in the morning when I got a ping. I literally jumped out of bed, threw some water on my face, and started calling my office in Hong Kong and my factories in China to tell them, let's get going. Let's start ordering trucks to pick up at the factories and can - and book space on container ships. And I figured, you know, in my head, you know, I'm thinking, trying to think 52,000 feet ahead, we'll just get going, and everything will be rolling. And then, of course, I get into the office, and my operations team says, wait a minute, it's not that easy just to turn the switch and get everybody going again. There's still a lot of processes that have to happen to really get all these orders back lined up and back in place to get going. But moving quickly and getting ready to try to be in business.
MARTIN: So 30% tariff tax is better than 145%. But you were telling me that it's like drinking spoiled milk instead of poison. Very vivid imagery, by the way. But why do you say that?
FOREMAN: Well, you know, we can be in business. I think that, you know, what we're feeling is that the president said everybody's got to endure. And he said everybody's got to endure some short-term pain for some long-term gain. So our feeling is that everybody in the supply chain is going to be willing to take a bit of the burden of this. So the consumer's going to pay a little bit more. The retailer's going to take a bit of a smaller margin. We'll take a little bit of a smaller margin, and the China factory will. And if everybody gets together and shares the burden, everybody will feel a little pinch, but not a huge pinch.
But if the consumer and the administration and the retailers try to put this burden just on a manufacturer like myself and try to expect us to eat the entire 30% tariff, then you're going to have a lot of problems with businesses because none of us have these kind of profit margins. So this has got to be something, you know, like buying war bonds back in the day, that everybody's going to have to chip in and help out. And, you know, we'll see if this all works and the jury's out, and it'll come in on - in November 26, and we'll see whether this policy was right or wrong.
MARTIN: But you were really worried that you might actually not have anything to sell at Christmas, which, frankly, let's just be honest, would have shut you down, right?
FOREMAN: Oh, for sure, 145% would have put my business and many, many others out of the market and out of business, and a huge shortage of merchandise for the holiday season. The 30% gets things moving. You're likely to see prices increase if everybody takes their part, about 10 to 15%. And, you know, we would assume with the stock market, you know, staying high and unemployment staying kind of at a reasonable level, that the market will be able to absorb that and things will kind of move on. And we'll, again, see whether the president's experiment works or not.
MARTIN: So we only have 20 seconds left. What if he makes another U-turn? What do you do?
FOREMAN: Well, if he makes another U-turn, it's just chaos for everybody again. And this is where they've got to sort of settle down. We were lucky, and we got the varsity team going to Switzerland to do this. The JV team is still out there working with every other market, and the president, of course, can lob a grenade into the middle of this at any time. So they've just got to settle down and move on and let people do business this year, and let's have Christmas.
MARTIN: That is Jay Foreman, CEO of Basic Fun! Jay, thanks so much for joining us once again. Appreciate it.
FOREMAN: You're welcome. Thanks for having me.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
