Former Target Corporation executive and Toys ‘R’ Us CEO Gerald Storch said Tuesday on Fox Business Network’s “Varney and Company” that concerns over President Donald Trump’s tariffs have been “grossly exaggerated.”
Host Stuart Varney said, “You ran one of the biggest toy stores in the world. How would you have handled the present situation if you could expect China made toys to go up 10 to 15% in price? How would you handle it?”
Storch said, “Well, first of all, they’re not going to go up 10 to 15 or 20% in price, but no, I think this whole thing with the tariffs is grossly exaggerated by a factor of at least two.”
He continued, “The tariffs are only in the cost of goods. They’re not on the retail price. So you put a tariff on the cost of the goods of 20%, it doesn’t mean the retail price goes up by 20%, not unless you can buy everything at a cost somewhere. Additionally, when they put tariffs on toys back in the first Trump administration, studies show 87% of the increase was borne by the Chinese manufacturers. China has a huge toy industry and they have everything to gain and nothing to lose by keeping the sale rather than have it moved to America, like a lot of it will do. Additionally, there are substitute products, you know, products that you can sell that are made in the U.S. instead of differences, promote those. And then, of course, there will be transfers, some sales to the U.S.”
Storch added, “I think people are hysterical. It’s not nearly the magnitude of what they’re talking about. And keep in mind, the retailers are going to do just fine no matter what happens. Because if they have to pass on a cost increase, they all will at the same time. And so prices will go up, their costs won’t go up in terms of labor and rent and things like that proportionally, and they’re going to do just fine. But I don’t think it’s going to go up nearly by as much as people say for all the reasons just outlined. And meanwhile, if it starts to do that, keep in mind, President Trump and his group, they can change. They’ve shown they’ll do that. They can be flexible and not doing this really damaging.”
Follow Pam Key on X @pamkeyNEN
Read the full article here