Trump’s tariffs on China are driving a “small American manufacturing company” to “the verge of ruin,” notes George Mason University economics professor Donald Boudreaux.
The Wall Street Journal reports on the likely demise of Learning Resources, which makes toys partly in China:
For weeks, Woldenberg and his roughly 500 employees—most at a suburban Chicago headquarters—have hastened to halt shipments, reroute cargo, raise prices and freeze expansion plans. The companies sued President Trump and other administration officials in federal court, winning a reprieve that is now under appeal and on hold. On Wednesday, the companies asked the Supreme Court to intervene in their favor. [Thus far, the Supreme Court has refused to do so.]
Through it all, the most pressing questions are how to move toy production out of China, where to move it—and how to get tons of manufacturing equipment there in time to meet deadlines for end-of-the-year holidays.
“It’s almost like an evacuation,” Woldenberg said. “We don’t have a place to make important items our reputation is built around.”
Lining up new factories in another country is just the start. Heavy manufacturing-molds must be transported hundreds or thousands of miles by truck or ship and then reassembled. Quality-control processes and safety inspections must be re-created.
On Woldenberg’s list: Vietnam, India and Cambodia. One place he isn’t considering: the U.S. American injection-molding factories aren’t set up—or cost-effective—for the painting, assembly and labor-intensive finishing the toys need, he said.
So the tariffs imposed on Chinese products won’t bring those jobs back to the U.S.
U.S. factory output has actually fallen somewhat due to the tariffs imposed under the Trump administration. Factory output rose in 2024, but fell slightly this year. Factory payrolls fell by 8,000 in April.
Bloomberg News gives examples of manufacturers that scaled back plans to expand their factories or production in the U.S. due to the tariffs. “In Illinois, Trump’s tariffs prompted a compressor maker to delay a key equipment purchase after an ambitious factory revamp. Rockwell Automation Inc., a Wisconsin-based producer of factory tools, says some manufacturers are putting projects on hold because of uncertainty over costs and future demand.”
Tariffs result in increased costs to manufacturers for the raw materials and inputs they need to manufacture their products. Economists warn that tariffs can shrink manufacturing output and slow economic growth.
For example, tariffs on steel wipe out more jobs than they save, because “steel is produced by a tiny sliver of the economy, but used as an input by a much broader swathe of manufacturers,” notes Justin Wolfers, an economist at the University of Michigan. President Trump raised tariffs on aluminum and steel from 25% to 50% starting June 4. As Investopedia notes, steel and aluminum tariffs have a history of wiping out more jobs than they save: The steel and aluminum tariffs Trump imposed back in 2018 shrank employment by 74,000 jobs, wiping out 75 times more jobs than they saved.
