Donald Trump was right again. “Maybe the children will have two dolls instead of 30 dolls,” he said in April about the consequences of his tariffs. “And maybe the two dolls will cost a couple of bucks more than they would normally.” Sure enough, Christmas is coming, and parents looking for toys face tariff-induced price hikes and shortages.
Most U.S. toy makers rely on factories outside the country to produce their designs, ranging from Legos to Hot Wheels. Seventy-seven percent of toys imported into the U.S. are made in China, where a network of factories can produce them at low cost.
When the White House this year began announcing tariffs on nearly every nation, U.S. toy companies panicked. Those with enough capital stocked up before tariffs took effect. But for many businesses, that wasn’t an option. When tariffs on China were at 145% this spring, Joann Cartiglia, owner of The Queen’s Treasures, a manufacturer in upstate New York, couldn’t afford to place orders.
Ms. Cartiglia works with Chinese factories to produce toys based on her designs; her brand is known for its character dolls based on Laura Ingalls Wilder’s “Little House on the Prairie” books. Ms. Cartiglia began ordering when tariffs later dropped to 30%, but she missed a critical shipping period and had to import 70% fewer toys than normal this year, leaving her with inventory shortages: “I’m coming into Christmas with so many products not in stock.”
Her experience is typical for small and midsize manufacturers with limited cash. Greg Ahearn, CEO of the Toy Association, an industry advocacy group, says he expects shortages of some toys this year. His predictions sound like something from the 1996 comedy “Jingle All the Way,” in which Arnold Schwarzenegger plays a dad desperately trying to find a sought-after action figure for his son after stores sell out.
American manufacturers have absorbed some of the costs. Mr. Ahearn says most U.S. toy brands have “taken a profitability hit.” Jay Foreman, CEO of Basic Fun!, a Florida-based manufacturer known for its Care Bears and Tonka trucks, calls 2025 “a throwaway year.” Lauren Derse, CEO of Learning Express, a franchise with 80 stores across the U.S., says that several of the company’s vendors have gone out of business, while others have laid off workers. “I feel awful for these companies,” she says.
Ms. Cartiglia of The Queen’s Treasures is 64 and had hoped to retire in the next two years but no longer sees that as possible. During the summer, she and her husband moved into a camper and rented out their home for extra cash. “It’s the government that is doing this to American entrepreneurs,” she says, her voice breaking.
Stan Veuger and Clark Packard review the Trump administration’s options, if the Supreme Court rules against the IEEPA levies, to continue to burden Americans with tariffs. Here’s their conclusion:
If the Supreme Court strikes down the IEEPA tariffs, the critical question becomes which alternative authorities the administration will deploy. Unfettered use of Sections 122 and 338 would recreate the current predicament: the president continuing to make major changes to tax policy and the business environment at his whim, generating paralyzing uncertainty, and redistributing massive amounts of resources without express congressional authorization.
The outlook improves somewhat if the administration must instead rely on sectoral “national security” tariffs under Section 232 and country-specific tariffs under Section 301, particularly if courts are less deferential to implausible claims about national security threats or unfair trading practices.
But meaningful reform requires Congress to rein in presidential authority—judicial constraints alone likely won’t suffice.
The secret sauce of US economic success has several essential ingredients. Among them: deep capital markets, a culture of entrepreneurial risk-taking, and, crucially, the willingness of the world’s smartest people to build their futures in America. As Washington prepares for a new technology-driven era with high geopolitical stakes, going light on that last ingredient—especially when it comes to Chinese talent—would be an act of self-harm dressed up as populist patriotism.
In short, Pacific Grove’s City Council voted to use our taxes to come up with a strategy to increase our taxes.
In its proposal, Props & Measures asks, “What are the general parameters (in dollars) of the tax tolerance among residents right now?” In short, how likely are we taxpayers to resist further tax increases?
The council is clearly looking for ways to tax us further. There are some legitimate ways to do that. One is for the members to spend their own funds on a campaign and get others who agree with them to spend their money. That’s what opponents of higher taxes must do. But the City Council is making us pay for their effort to figure out how to make us pay more. That isn’t only unfair, it’s corrupt.
In a 1968 article in the Journal of Law and Economics, James R. Schlesinger—later defense secretary under Presidents Richard Nixon and Gerald Ford and energy secretary under President Jimmy Carter—wrote: “The tool of politics (which frequently becomes its objective) is to extract resources from the general taxpayer with minimum offense and to distribute the proceeds among innumerable claimants in such a way as to maximize support at the polls. Politics, so far as mobilizing support is concerned, represents the art of calculated cheating—or more precisely how to cheat without being really caught.”
The good news is that the Pacific Grove residents who alerted me to this have caught the cheaters. Is it too late? Time will tell.
The Editors of The Free Press decry Europe’s battering of free speech. Two slices:
It’s no secret that free speech is under attack across Europe. Under the guise of preserving order and protecting the public from ill-defined harms, authorities across the continent have embarked on a program of censoring wrongthink and jailing violators. Still, it wasn’t obvious that European authorities intended to make money by suppressing speech. On Friday, it became clear when the European Union fined X 120 million euros (about $140 million) for a series of alleged violations of the Digital Services Act, making the social media platform the first company to face a fine under the 2022 law.
The stated reasons for the fine are a lack of transparency, a violation of advertising rules, and misleading users with “deceptive” design. The real reasons have little to do with those allegations, and everything to do with the kind of speech the EU wants to suppress: perspectives that have not been filtered through bureaucrats, academics, or media professionals; views that go against the received wisdom of policymakers; and views that have not been vetted and found to be acceptable by governments. Any company that utters the wrong kind of speech should now know that the meter is running.
…..
The stakes here are much larger than the fine that the EU wants Musk and X to pay. For the U.S. or American corporations to give in to these kinds of demands would invite nonstop extortion from foreign mandarins. Europe’s aim is not to change the color of X’s check marks. It is to make it more expensive for U.S. companies to allow speech than to restrict it. And not only speech in Europe, but across the world. Because even the bureaucrats know that when you are trying to keep out ideas, you can never put enough locks on the door.
