LONG BEACH, Calif. (KGTV) — People in the toy industry are driven by a passion for bringing joy to children, but toy companies are now paying more attention to where their products are manufactured as trade policies shift.
At TAG Toys in Compton, California, large machines put together all the bits and pieces while skilled workers smooth out the edges of wooden toys.
Erik Wilson, who oversees operations at TAG Toys, says his company is distinctly American.
"Most of our product's raw materials are sourced domestically," Wilson said.
Locally-made toys go against the industry trend, considering around 80% of toys sold in the U.S. are manufactured in China. Wilson said the crackdown on foreign-made goods is already giving his company a competitive edge.
"I expect an increase in business. Our employees will see more hours; we're going to hire more employees when that contract work comes through. And then all our suppliers are going to see more work," Wilson said.
With higher shipping costs and import taxes on toys coming in from overseas, most competitors will have to raise prices. The Toy Association, a leading nonprofit in the industry, warns that nearly 50% of small and mid-size toy companies expect to go out of business due to these changes.
Suraj Chugani, owner of Mini Motorz in the Lakewood Center Mall, said his sales prices may go up by at least 30%. For nearly 20 years, every part of his electric toy cars -- from the plastic to the molds -- has come from China. Now he's considering other options.
"The components are already sitting in the factories in China, so to make that shift happen to another country will be a bit of a process, but we're looking into it," Chugani said.
Big brand names like LEGO and Barbie-maker Mattel are also trying to move production. Those companies and Chugani are relying on current inventory and delaying new toy orders, hoping for more certainty around tariffs before the holidays.
"There will be a time when the new shipments come in and it will be no choice but to pass on the extra cost," Chugani said.
Meanwhile, Wilson and other American businesses are welcoming this change.
