December 26, 2025 • 23 mins
Since the start of his second term, US President Donald Trump has imposed sweeping tariffs – especially on China, where most toys are made.
On today’s Big Take Asia Podcast, host Oanh Ha talks with Rick Woldenberg, CEO of fourth‑generation toymaker Learning Resources, about his company’s battle against tariffs in stores and in court – and what it reveals about the true cost of America’s trade war.
Read more: Cutting Ties With China Is Harder Than Companies Expected
Tariffs Unravel India’s Dream of Challenging China in Toymaking
Further listening: An American Toymaker Struggles to Break Up With China
India Wanted to Become The World’s Toymaker. Then Tariffs Happened
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
Do you want to look at it number seven or
do you want to look at something else? Okay, a
clear one.
Speaker 3 (00:19):
This summer, Dylan Brochar's four and seven year old daughters
got hooked on a British cartoon that teaches kids about
counting and math.
Speaker 4 (00:27):
One bird, Hello bird, one tree, Hello tree.
Speaker 3 (00:34):
The stars of Number Blocks are bright, playful characters built
from stackable plastic blocks, with faces and hands that bring
them to life. They've captured the imagination of young kids everywhere,
including Dylan's youngest daughter.
Speaker 2 (00:47):
She'll just sit and watch it and she'll sing the
song because one and one.
Speaker 1 (00:53):
Mate two another one is that's three.
Speaker 5 (00:58):
It's calling for her.
Speaker 3 (01:03):
The characters from Number Blocks are licensed by an American
toy maker, Learning Resources, which produces the line of toys,
and naturally, Dylan's daughter wanted a set of her own, like.
Speaker 2 (01:15):
Any other consumer, would you know. I got on Google
and found where to purchase them, and I think the
cheapest set we could find it was just like a one,
two and three blocks, so three little tiny toys. It
was you know, twenty dollars and the smaller sets were
twenty five thirty dollars each.
Speaker 3 (01:35):
The price gave Dylan pause. He and his family live
in what he calls the cornfields of Indiana. As a
seventh grade science teacher, Dylan keeps a careful watch on
the family spending. In June, Learning Resources raised prices on
its toys by an average of six percent, which bumped
most number blocks up by a few dollars. That may
(01:56):
not seem like much, but for Dylan, who's seen costs
of everything from groceries to toys climb this year, the
increase was too steep.
Speaker 5 (02:04):
You're getting less stuff for the same amount of money.
Speaker 2 (02:07):
It's not in the budget to buy multiple sets of
prices of toys that are, you know, continuing to go
up the same way everything is.
Speaker 3 (02:17):
The girls did get their number blocks, but it wasn't
from Amazon or the stores.
Speaker 5 (02:23):
Are you going to come helping me? Send it to
the printer?
Speaker 3 (02:24):
Baby, Dylan sat down at his computer, designed the characters himself,
and printed them out on his home three D printer
for a fraction of the price the amount.
Speaker 2 (02:35):
Of plastic that I use on It's less than fifty
cents for a little doll So it's it's crazy.
Speaker 3 (02:42):
For Dylan, it was a thrifty hack to save money
for learning resources. It's a troubling tipping point when prices
climb too high. Some consumers don't just cut back, they
walk away altogether. But the company felt it had no choice.
Speaker 6 (02:59):
We did that to kind of balance the books, if
you will.
Speaker 3 (03:02):
Rick Woldenberg is the CEO of Learning Resources.
Speaker 6 (03:06):
We raise prices middle single digits and we're trying to
make that stick. By that, I mean we're trying to
hold there. I really don't want a penny relating to
tariffs that I don't.
Speaker 3 (03:19):
Need, Rick says Learning Resources price increase was driven by
President Donald Trump's tariff hikes.
Speaker 1 (03:26):
Here is the deal that I will be offering to
every major company and manufacture on Earth. I will give
you the lowest taxes.
Speaker 3 (03:35):
Since the start of his second term, President Trump has
imposed sweeping tariffs, most notably on China, where most toys
are made. The policy was billed as a way to
boost US tax revenue and push brands to bring manufacturing
back home, and Trump insists that foreign countries and companies
would be the ones footing the bill. Here he is
(03:56):
on c SPAN during his campaign.
Speaker 1 (03:58):
A tariff is a tax or to foreign country that's
the way it is, whether you like it and that
a lot of people like to soil, or it's a
tax or US No, no, no, it's a tax on
a foreign country.
Speaker 3 (04:10):
That's not the way things have turned out for Learning Resources.
About half of its products are still made in China,
where tariffs hit one hundred and forty five percent in April,
though that's now been reduced to thirty one percent. The
company has accelerated its shift from China to neighboring Vietnam,
where exports to the US face a twenty percent levy.
(04:30):
But tariffs aren't paid by the foreign factories that make
the toys. They're paid by the importer when goods are
brought into the US, in this case Learning Resources.
Speaker 6 (04:41):
And that's actual cash out the door from US, not
from China or India or Vietnam. No countries are paying it.
We write the checks, we borrow the money from the bank,
and send the money to the government.
Speaker 3 (04:58):
In twenty twenty four, the company paid about two million
dollars in tariffs. This year that's jumped to about fourteen
million dollars. Like many American companies manufacturing overseas, Learning Resources
front loaded inventory before higher levees took effect. That's helped
it to avoid passing the full cost onto consumers. But
(05:20):
that wasn't the only battle it took on. In April,
the company took its fight to court, arguing the president
lacked authority to impose tariffs. The case now sits before
the Supreme Court. Rick is hopeful the court will rule
the tariffs illegal, but if it upholds administration's levees, he
says his company won't be able to hold on much longer.
Speaker 6 (05:41):
No American consumers should kid themselves as to who will
pay this tax. We can't absorb it, and they're kidding
themselves as they think that companies will absorb it. They
will just pass it on, maybe not all in one go,
but they will preserve their margin in order to remain viable.
(06:02):
And that means foreign countries are not paying less tax
and US companies will pass it along. So you know
who's going to pay it you.
Speaker 3 (06:18):
This is the big take Asia from Bloomberg News. I'm wanha.
Over the past year, we followed an American toy company
as it fled China and scrambled to rebuild its supply
chains in Asia. Today, in our final chapter, we see
what the tariff chaos looks like when it lands on
American shores, when the bill finally comes due, and how
(06:39):
one family owned toy maker is pushing back in the courts.
Speaker 6 (06:53):
This warehouse is three hundred and fifty six thousand square feets.
It's about a half mile around on the PREMI at her,
so if you walked along the wall in a circle,
that'd be about a half a mile.
Speaker 3 (07:06):
Rick Woldenberg is taking us on a tour of what
he calls his Shiny Penny in Burning Hills outside of Chicago.
It's a warehouse the company built four years ago, and
it holds nearly all of learning resources two thousand or
so products. When you order one of the company's toys
online the Noodle Puzzles or Botley the coating Robot, chances
are it will come through here. The space stretches out
(07:31):
like a canyon, and Bayer belt crisscross the floor, while
shelves stacked more than thirty feet high are loaded with pallets.
On the floor, a worker moves through the aisles, pulling
individual toys from the shelves and packing them into cardboard
boxes that make their way through the factory.
Speaker 6 (07:50):
So if you see she's wearing a headset, so that's
voice to pick. And on her arm she has a
little display, and on her finger she has a scanner.
And then she just scanned the products, scans it out
of its pation, scans it into the box.
Speaker 3 (08:04):
As Rick shows off the plant's technology, he says he's
frustrated by the Trump administration's narrative that companies importing goods
into the US are somehow bad actors that don't invest
at home, and that if you tax those companies heavily enough,
they'll be forced to build factories in America.
Speaker 1 (08:23):
Companies know that if they build in America, there are
no tariffs, and that's why they're coming home to the
USA in record numbers. They're building factories and plants and level.
Speaker 7 (08:35):
The main thing that the Trump administration is trying to
accomplish with tariffs is to make those goods from overseas
more expensive, so that the companies rethink where they buy
them from and source them in the US if they can.
Speaker 3 (08:48):
Brendon Murray is Bloomberg's Global Trade editor. He spent much
of the last year covering the Trade Board and its
effect on global supply chains. He says, in some cases,
President Trump's TARF policy show signs of their intended outcome.
Speaker 7 (09:03):
We've seen pharmaceutical companies say that they are going to
produce more drugs in the US, and so the effect
is happening. It's just happening at a very slow pace
and not a huge scale at this point. The big
question really is how much of it is going to
be these kinds of good paying factory jobs that the
(09:26):
administration thinks they're going to create, or are these a
lot of these going to be data centers and not
very labor intensive facilities that don't create this renaissance of
manufacturing jobs that the administration has pledged they're going to
try to accomplish.
Speaker 3 (09:45):
Rick says Trump's vision of bringing back manufacturing jobs may
never materialize in his industry. That's because toy companies like
his rely heavily on manual labor, actual human hands that
braid doll hair, Teddy Bears, and solder electronics. For years,
the company's production has been concentrated in China and other
(10:06):
emerging markets where labor costs are lower. Rick says most
toy companies made that pivot decades ago. Same goes for
the fast network of suppliers the toy industry depends on
everything from plastics to electronics. The stuffing and rebuilding that
infrastructure here, he argues, just wouldn't make financial sense.
Speaker 6 (10:25):
The jingoistic desire to have things made in the US
is a sort of recurrent theme. It comes and it goes.
And so for many years, at least ten, we've looked
for any factory that would work with us to make
anything so that we could cobble together a ten product range.
(10:48):
We have over two thousand products, ten products that are
made in the USA. So we go to a retailer
and say, here, made in the USA. Can't do it.
And so I firmly believe that there is no capacity
to make the kinds of products that we make. We're
going to stay in this business. We can't make the
stuff in the US. Nobody wants to make it.
Speaker 3 (11:10):
What learning resources can build in the US. Is this
a high tech distribution center that maximizes automation. Inside conveyor
belts move boxes that are tracked by software. The system
knows exactly where boxes and exactly what needs to be
filled for customers. Gigantic robotic arms the size of cars
(11:31):
swing into action, Wrapping palettes in plastic.
Speaker 6 (11:36):
The system is paperless, the HANT and we've been payperless
since ninety nine and highly automated. I'll show you this
pick module here is for ship ins of full cases.
Speaker 3 (11:50):
And though his warehouse doesn't make any toys, Rick says
it still represents a huge investment in the US that
the White House unfairly dismisses.
Speaker 8 (12:00):
This building's not free and stelf the Senate is not free,
and like this is technology, and you know where this
was made, of course in the United States. And there's
probably a dozen pieces of software here that are talking
to each other.
Speaker 6 (12:14):
And guess where that comes from.
Speaker 8 (12:16):
This is a high tech place.
Speaker 6 (12:19):
It's just not what they have in mind.
Speaker 8 (12:21):
But like, come on, isn't this an encouraged activity. Isn't
this good? These people have jobs. They're good jobs too,
or else they wouldn't work here.
Speaker 3 (12:34):
Rick had plans to open an even bigger distribution center,
doubling his footprint and adding scores of new employees, but
those ambitions have been put on ice as he's been
forced to divert funds from developing new projects to paying tariffs.
And Rick says the tariffs haven't just affected the company's
plans to expand and innovate. They've also eroded its existing business.
(12:57):
As he walks us through the factory, Rick says he
and his team have had to make tough decisions about
which products deserve space on the shelves. Some simply don't
make the cut anymore.
Speaker 6 (13:09):
It's also sacrifice of new revenue, because as your backlist declines,
you want to bring in new products to create new
revenue opportunities. It's innovation, and our customers want new product.
You don't go into a toy store and say, show
me what's old.
Speaker 3 (13:27):
Rick's decision to put new investments on hold while covering
tariff costs first is one that many small and mid
sized firms face. Brendan says, perhaps the biggest issue for
companies big and small is the unpredictability of the policy
fifty percent on India, new levies on Vietnam, renegotiated tariffs
(13:47):
on China.
Speaker 7 (13:48):
The officials that we have talked to would say privately,
it's been chaotic. It's been it's kind of zigzagged back
and forth between going full on with tariffs and scaling.
Speaker 5 (13:59):
Them back and creating carve.
Speaker 7 (14:01):
Outs and exclusions, and so the end result the administration
would probably say, look, we have taken tariffs, which were
essentially rarely used at the beginning of the second Trump administration,
to something that is now kind of an everyday tool
that the President has used, the stock market has gotten
used to it, and it's just a matter of this
(14:23):
adjustment that small companies in particular are going.
Speaker 5 (14:26):
To have to go through.
Speaker 3 (14:30):
In his shiny penny warehouse in Chicago, Rick says all
of that disruption leaves him feeling like a nomad moving
from one country to the next in search of a
safe harbor where teriff rates won't threaten his company's survival.
Speaker 6 (14:44):
We go from jurisdiction to jurisdiction, and no matter what
we guess, it seems like it's wrong.
Speaker 3 (14:55):
After the break, how the tariff shock waves have rippled
out from China a Chicago warehouse and into storefronts, and
how Learning Resources is fighting.
Speaker 9 (15:05):
Back This one.
Speaker 4 (15:19):
I love this one. This is by Learning Resources, and
I love.
Speaker 3 (15:26):
Kathleen Donahue owns Labyrinth Games and Puzzles in Washington, DC.
Speaker 4 (15:30):
It's a speed dice rolling where you work on math skills,
so you're rolling dice as fast as you can.
Speaker 3 (15:36):
In Dice of Fury, Kathleen celebrating fifteen years in business,
but she says this year has been a roller coaster.
Speaker 9 (15:44):
It feels like every six months someone else hits me
in the face. This year has been challenging, but also
weirdly good.
Speaker 3 (15:55):
Weirdly good because she feels the community is rallying to
support small business, but the economics are getting tougher. Brands
keep raising wholesale prices, and retailers can't pass all of
that onto consumers without losing sales. She says there's a
limit to what families are willing to spend.
Speaker 4 (16:14):
I feel like people are now going twenty five to
thirty dollars for a birthday present, but certainly we'd try
not to carry very many games that go over that
twenty five dollars.
Speaker 3 (16:28):
Kathleen says she's seen inflation effect just about everyone lately,
but it's been especially hard on younger families. In Washington, DC, we.
Speaker 9 (16:36):
Had tons of people in the store playing games and stuff,
but nobody was spending money, especially if they work for
the federal government. When they shut down the government, you know,
a lot of those people had to take loans to
just live. They're certainly not going to be spending on
games or puzzles like that's going to happen these days.
Speaker 3 (16:55):
When Kathleen looks at the toy business, she sees an
industry in disarray. She says, small board game makers, often
mom and pop businesses, have been hit especially hard by
the chaos. She's been caught in the tariff trap herself,
paying board game publishers for goods that have never arrived.
Speaker 9 (17:12):
They have my money. I have no games. Yes, there
have been multiple things that I've already paid for that
we're supposed to be here that aren't here because they
can't ship them from China because they don't have enough
money to pay the tariffs.
Speaker 3 (17:27):
The math on her own business is getting brutal, and
Kathleen says she's making a lot less overall.
Speaker 9 (17:34):
The prices have gone up, the margins have gone down. Basically,
it looks like our sales are up a little bit,
but our margins are down by two to three percent
across the board from this year this time to last
year this time. But we've also just said we have
to charge.
Speaker 3 (17:52):
More earlier this year. Trump made headlines when he suggested
the tariffs could mean fewer toys for American kids.
Speaker 1 (18:01):
Maybe the children will have two dollars instead of thirty dollars,
and maybe the two dolls will cost a couple of
bucks more than they would normally.
Speaker 3 (18:08):
Bloomberg's Brendan Murray says Trump and the White House are
using tariffs to safeguard an American way of life that
they feel is at risk, and higher prices for consumers
is a trade off.
Speaker 7 (18:21):
I think that's the administration's view, is that the American
dream is not built around the ability to buy things
as cheaply as possible. It's built around having a middle
class job where you can educate your children's and have
a home and live that sort of romanticized version of
what Americans considered to be a prosperous lifestyle. And President
(18:43):
Trump believes that's been lost and he's trying to regain that,
and tariffs are the main tool that is using to
do so.
Speaker 3 (18:56):
Back at Learning Resources headquarters in Illinois, Slinenberg says he
also wants to preserve the American dream that began with
his grandfather. His granddad started the business more than one
hundred years ago, and he and his children are running it.
But Rick's now facing a reality he never imagined. Chaotic
pricing the hibernation of products millions of dollars to move
(19:19):
his supply chain.
Speaker 6 (19:20):
And this is what happens for stops start, turn left,
turn right, yo yo here yo yo. There is my
life now.
Speaker 3 (19:29):
In this April, Learning Resources sued Trump, arguing that the
president doesn't have the constitutional authority to impose these taxes
without congressional approval. Rick calls it taxation without representation.
Speaker 6 (19:43):
I was pissed and the future of our company. You're
talking about over one hundred years of a family business,
which I see in the context of providing jobs to
thousands of people who live in the Chicago area since
nineteen sixteen and having a substantial impact on the community
I live in. I was not point to passively allow
(20:05):
this to be extinguished by politicians, and I thought this
was unlawful, so I sighed, sue.
Speaker 3 (20:13):
Suing the President of the United States isn't cheap. The
legal fees are likely to total millions of dollars, and
Rick's company is responsible for paying that bill. If Learning
Resources wins, it could get a refund of millions of
dollars in tariffs money that could restart those canceled product lines.
Speaker 6 (20:32):
But if it loses I can tell you that, in
my opinion, that is a horrific outcome that every American
should lose sleepover. It would affect people's faith in rule
of law. And if you doubt rule of law, you
also doubt whether your personal freedoms will be respected, and
(20:55):
the whole concept of the country unravels.
Speaker 3 (21:00):
The Global trade War has reshaped the world map, moving
factories from China to Vietnam, India and other emerging countries,
but the shock waves have also hit home in West Lafayette, Indiana.
Inside Dylan Bushar's living room, Dylan's daughter has autism and
for her, toys like number blocks aren't just playthings.
Speaker 5 (21:21):
It's comfortable for her.
Speaker 2 (21:23):
I don't know if that makes sense, but like if
she's overwhelmed, if she's you know, overstimulated, which is what
happens to her oftentimes, like number blocks will like calm
her heart rate. Now, like she'll set in my lab.
I'll hold her. I can feel her heart beating slower.
Speaker 1 (21:40):
You know.
Speaker 2 (21:40):
It's just it's something she's she knows and she's comfortable
with and she's learning.
Speaker 3 (21:47):
Dylan was able to make his own version of number blocks,
but he knows not every family has that option. For some,
the choice comes down to a twenty five dollars toy
or putting food on the table. And while he sidesteps
expense by three D printing sum toys, Dylan says the
decision to wage tariff wars weighs heavily on families like his.
(22:08):
He can see the impact of tariffs just by looking
at his plans for the holidays. Things are going to
be a lot less Christmasy this year.
Speaker 2 (22:16):
For the girls because we spent the same amount of
money as we always do.
Speaker 5 (22:21):
We just have less stuff.
Speaker 2 (22:23):
You know, it's still going to be Christmas more, He's
still going to be presents to open, but it's noticeable
what a dollar is going.
Speaker 5 (22:30):
To buy you.
Speaker 3 (22:31):
So it sounds like there's going to be less presence
underneath the Christmas tree this year, even though you're spending
just as much.
Speaker 2 (22:36):
Yeah, we didn't need to start a second ring around,
Like you know, there's no stacking. It's just a it's
a donut, so there's no there's no third dimension to it.
Speaker 3 (22:55):
This is the big take Asia from Bloomberg News. I'm Wanha.
We followed learning recent sources from the factory floor in
Vietnam and India to the Supreme Court. You can listen
to the full series wherever you get your podcasts. The
show is hosted by Me, David Gura, and Sarah Holder.
The show is made by Aaron Edwards, David Fox, Jeff Grocott,
(23:16):
Eleanor Harrison Dengate, Patty hirsh Rachel Lewis, Krisky, Katie mcmurranmi Um,
Julia Press, Tracy Samuelson, Naomi Shaven, Alex Sugiia, Julia Weaver,
Young Young and Taka Yasuzawa. To get more from the
Big Take and unlimited access to all of Bloomberg dot com,
subscribe today at Bloomberg dot Com Slash Podcast offer. Thanks
(23:39):
for listening. We'll be back on Monday.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
Do you want to look at it number seven or
do you want to look at something else? Okay, a
clear one.
Speaker 3 (00:19):
This summer, Dylan Brochar's four and seven year old daughters
got hooked on a British cartoon that teaches kids about
counting and math.
Speaker 4 (00:27):
One bird, Hello bird, one tree, Hello tree.
Speaker 3 (00:34):
The stars of Number Blocks are bright, playful characters built
from stackable plastic blocks, with faces and hands that bring
them to life. They've captured the imagination of young kids everywhere,
including Dylan's youngest daughter.
Speaker 2 (00:47):
She'll just sit and watch it and she'll sing the
song because one and one.
Speaker 1 (00:53):
Mate two another one is that's three.
Speaker 5 (00:58):
It's calling for her.
Speaker 3 (01:03):
The characters from Number Blocks are licensed by an American
toy maker, Learning Resources, which produces the line of toys,
and naturally, Dylan's daughter wanted a set of her own, like.
Speaker 2 (01:15):
Any other consumer, would you know. I got on Google
and found where to purchase them, and I think the
cheapest set we could find it was just like a one,
two and three blocks, so three little tiny toys. It
was you know, twenty dollars and the smaller sets were
twenty five thirty dollars each.
Speaker 3 (01:35):
The price gave Dylan pause. He and his family live
in what he calls the cornfields of Indiana. As a
seventh grade science teacher, Dylan keeps a careful watch on
the family spending. In June, Learning Resources raised prices on
its toys by an average of six percent, which bumped
most number blocks up by a few dollars. That may
(01:56):
not seem like much, but for Dylan, who's seen costs
of everything from groceries to toys climb this year, the
increase was too steep.
Speaker 5 (02:04):
You're getting less stuff for the same amount of money.
Speaker 2 (02:07):
It's not in the budget to buy multiple sets of
prices of toys that are, you know, continuing to go
up the same way everything is.
Speaker 3 (02:17):
The girls did get their number blocks, but it wasn't
from Amazon or the stores.
Speaker 5 (02:23):
Are you going to come helping me? Send it to
the printer?
Speaker 3 (02:24):
Baby, Dylan sat down at his computer, designed the characters himself,
and printed them out on his home three D printer
for a fraction of the price the amount.
Speaker 2 (02:35):
Of plastic that I use on It's less than fifty
cents for a little doll So it's it's crazy.
Speaker 3 (02:42):
For Dylan, it was a thrifty hack to save money
for learning resources. It's a troubling tipping point when prices
climb too high. Some consumers don't just cut back, they
walk away altogether. But the company felt it had no choice.
Speaker 6 (02:59):
We did that to kind of balance the books, if
you will.
Speaker 3 (03:02):
Rick Woldenberg is the CEO of Learning Resources.
Speaker 6 (03:06):
We raise prices middle single digits and we're trying to
make that stick. By that, I mean we're trying to
hold there. I really don't want a penny relating to
tariffs that I don't.
Speaker 3 (03:19):
Need, Rick says Learning Resources price increase was driven by
President Donald Trump's tariff hikes.
Speaker 1 (03:26):
Here is the deal that I will be offering to
every major company and manufacture on Earth. I will give
you the lowest taxes.
Speaker 3 (03:35):
Since the start of his second term, President Trump has
imposed sweeping tariffs, most notably on China, where most toys
are made. The policy was billed as a way to
boost US tax revenue and push brands to bring manufacturing
back home, and Trump insists that foreign countries and companies
would be the ones footing the bill. Here he is
(03:56):
on c SPAN during his campaign.
Speaker 1 (03:58):
A tariff is a tax or to foreign country that's
the way it is, whether you like it and that
a lot of people like to soil, or it's a
tax or US No, no, no, it's a tax on
a foreign country.
Speaker 3 (04:10):
That's not the way things have turned out for Learning Resources.
About half of its products are still made in China,
where tariffs hit one hundred and forty five percent in April,
though that's now been reduced to thirty one percent. The
company has accelerated its shift from China to neighboring Vietnam,
where exports to the US face a twenty percent levy.
(04:30):
But tariffs aren't paid by the foreign factories that make
the toys. They're paid by the importer when goods are
brought into the US, in this case Learning Resources.
Speaker 6 (04:41):
And that's actual cash out the door from US, not
from China or India or Vietnam. No countries are paying it.
We write the checks, we borrow the money from the bank,
and send the money to the government.
Speaker 3 (04:58):
In twenty twenty four, the company paid about two million
dollars in tariffs. This year that's jumped to about fourteen
million dollars. Like many American companies manufacturing overseas, Learning Resources
front loaded inventory before higher levees took effect. That's helped
it to avoid passing the full cost onto consumers. But
(05:20):
that wasn't the only battle it took on. In April,
the company took its fight to court, arguing the president
lacked authority to impose tariffs. The case now sits before
the Supreme Court. Rick is hopeful the court will rule
the tariffs illegal, but if it upholds administration's levees, he
says his company won't be able to hold on much longer.
Speaker 6 (05:41):
No American consumers should kid themselves as to who will
pay this tax. We can't absorb it, and they're kidding
themselves as they think that companies will absorb it. They
will just pass it on, maybe not all in one go,
but they will preserve their margin in order to remain viable.
(06:02):
And that means foreign countries are not paying less tax
and US companies will pass it along. So you know
who's going to pay it you.
Speaker 3 (06:18):
This is the big take Asia from Bloomberg News. I'm wanha.
Over the past year, we followed an American toy company
as it fled China and scrambled to rebuild its supply
chains in Asia. Today, in our final chapter, we see
what the tariff chaos looks like when it lands on
American shores, when the bill finally comes due, and how
(06:39):
one family owned toy maker is pushing back in the courts.
Speaker 6 (06:53):
This warehouse is three hundred and fifty six thousand square feets.
It's about a half mile around on the PREMI at her,
so if you walked along the wall in a circle,
that'd be about a half a mile.
Speaker 3 (07:06):
Rick Woldenberg is taking us on a tour of what
he calls his Shiny Penny in Burning Hills outside of Chicago.
It's a warehouse the company built four years ago, and
it holds nearly all of learning resources two thousand or
so products. When you order one of the company's toys
online the Noodle Puzzles or Botley the coating Robot, chances
are it will come through here. The space stretches out
(07:31):
like a canyon, and Bayer belt crisscross the floor, while
shelves stacked more than thirty feet high are loaded with pallets.
On the floor, a worker moves through the aisles, pulling
individual toys from the shelves and packing them into cardboard
boxes that make their way through the factory.
Speaker 6 (07:50):
So if you see she's wearing a headset, so that's
voice to pick. And on her arm she has a
little display, and on her finger she has a scanner.
And then she just scanned the products, scans it out
of its pation, scans it into the box.
Speaker 3 (08:04):
As Rick shows off the plant's technology, he says he's
frustrated by the Trump administration's narrative that companies importing goods
into the US are somehow bad actors that don't invest
at home, and that if you tax those companies heavily enough,
they'll be forced to build factories in America.
Speaker 1 (08:23):
Companies know that if they build in America, there are
no tariffs, and that's why they're coming home to the
USA in record numbers. They're building factories and plants and level.
Speaker 7 (08:35):
The main thing that the Trump administration is trying to
accomplish with tariffs is to make those goods from overseas
more expensive, so that the companies rethink where they buy
them from and source them in the US if they can.
Speaker 3 (08:48):
Brendon Murray is Bloomberg's Global Trade editor. He spent much
of the last year covering the Trade Board and its
effect on global supply chains. He says, in some cases,
President Trump's TARF policy show signs of their intended outcome.
Speaker 7 (09:03):
We've seen pharmaceutical companies say that they are going to
produce more drugs in the US, and so the effect
is happening. It's just happening at a very slow pace
and not a huge scale at this point. The big
question really is how much of it is going to
be these kinds of good paying factory jobs that the
(09:26):
administration thinks they're going to create, or are these a
lot of these going to be data centers and not
very labor intensive facilities that don't create this renaissance of
manufacturing jobs that the administration has pledged they're going to
try to accomplish.
Speaker 3 (09:45):
Rick says Trump's vision of bringing back manufacturing jobs may
never materialize in his industry. That's because toy companies like
his rely heavily on manual labor, actual human hands that
braid doll hair, Teddy Bears, and solder electronics. For years,
the company's production has been concentrated in China and other
(10:06):
emerging markets where labor costs are lower. Rick says most
toy companies made that pivot decades ago. Same goes for
the fast network of suppliers the toy industry depends on
everything from plastics to electronics. The stuffing and rebuilding that
infrastructure here, he argues, just wouldn't make financial sense.
Speaker 6 (10:25):
The jingoistic desire to have things made in the US
is a sort of recurrent theme. It comes and it goes.
And so for many years, at least ten, we've looked
for any factory that would work with us to make
anything so that we could cobble together a ten product range.
(10:48):
We have over two thousand products, ten products that are
made in the USA. So we go to a retailer
and say, here, made in the USA. Can't do it.
And so I firmly believe that there is no capacity
to make the kinds of products that we make. We're
going to stay in this business. We can't make the
stuff in the US. Nobody wants to make it.
Speaker 3 (11:10):
What learning resources can build in the US. Is this
a high tech distribution center that maximizes automation. Inside conveyor
belts move boxes that are tracked by software. The system
knows exactly where boxes and exactly what needs to be
filled for customers. Gigantic robotic arms the size of cars
(11:31):
swing into action, Wrapping palettes in plastic.
Speaker 6 (11:36):
The system is paperless, the HANT and we've been payperless
since ninety nine and highly automated. I'll show you this
pick module here is for ship ins of full cases.
Speaker 3 (11:50):
And though his warehouse doesn't make any toys, Rick says
it still represents a huge investment in the US that
the White House unfairly dismisses.
Speaker 8 (12:00):
This building's not free and stelf the Senate is not free,
and like this is technology, and you know where this
was made, of course in the United States. And there's
probably a dozen pieces of software here that are talking
to each other.
Speaker 6 (12:14):
And guess where that comes from.
Speaker 8 (12:16):
This is a high tech place.
Speaker 6 (12:19):
It's just not what they have in mind.
Speaker 8 (12:21):
But like, come on, isn't this an encouraged activity. Isn't
this good? These people have jobs. They're good jobs too,
or else they wouldn't work here.
Speaker 3 (12:34):
Rick had plans to open an even bigger distribution center,
doubling his footprint and adding scores of new employees, but
those ambitions have been put on ice as he's been
forced to divert funds from developing new projects to paying tariffs.
And Rick says the tariffs haven't just affected the company's
plans to expand and innovate. They've also eroded its existing business.
(12:57):
As he walks us through the factory, Rick says he
and his team have had to make tough decisions about
which products deserve space on the shelves. Some simply don't
make the cut anymore.
Speaker 6 (13:09):
It's also sacrifice of new revenue, because as your backlist declines,
you want to bring in new products to create new
revenue opportunities. It's innovation, and our customers want new product.
You don't go into a toy store and say, show
me what's old.
Speaker 3 (13:27):
Rick's decision to put new investments on hold while covering
tariff costs first is one that many small and mid
sized firms face. Brendan says, perhaps the biggest issue for
companies big and small is the unpredictability of the policy
fifty percent on India, new levies on Vietnam, renegotiated tariffs
(13:47):
on China.
Speaker 7 (13:48):
The officials that we have talked to would say privately,
it's been chaotic. It's been it's kind of zigzagged back
and forth between going full on with tariffs and scaling.
Speaker 5 (13:59):
Them back and creating carve.
Speaker 7 (14:01):
Outs and exclusions, and so the end result the administration
would probably say, look, we have taken tariffs, which were
essentially rarely used at the beginning of the second Trump administration,
to something that is now kind of an everyday tool
that the President has used, the stock market has gotten
used to it, and it's just a matter of this
(14:23):
adjustment that small companies in particular are going.
Speaker 5 (14:26):
To have to go through.
Speaker 3 (14:30):
In his shiny penny warehouse in Chicago, Rick says all
of that disruption leaves him feeling like a nomad moving
from one country to the next in search of a
safe harbor where teriff rates won't threaten his company's survival.
Speaker 6 (14:44):
We go from jurisdiction to jurisdiction, and no matter what
we guess, it seems like it's wrong.
Speaker 3 (14:55):
After the break, how the tariff shock waves have rippled
out from China a Chicago warehouse and into storefronts, and
how Learning Resources is fighting.
Speaker 9 (15:05):
Back This one.
Speaker 4 (15:19):
I love this one. This is by Learning Resources, and
I love.
Speaker 3 (15:26):
Kathleen Donahue owns Labyrinth Games and Puzzles in Washington, DC.
Speaker 4 (15:30):
It's a speed dice rolling where you work on math skills,
so you're rolling dice as fast as you can.
Speaker 3 (15:36):
In Dice of Fury, Kathleen celebrating fifteen years in business,
but she says this year has been a roller coaster.
Speaker 9 (15:44):
It feels like every six months someone else hits me
in the face. This year has been challenging, but also
weirdly good.
Speaker 3 (15:55):
Weirdly good because she feels the community is rallying to
support small business, but the economics are getting tougher. Brands
keep raising wholesale prices, and retailers can't pass all of
that onto consumers without losing sales. She says there's a
limit to what families are willing to spend.
Speaker 4 (16:14):
I feel like people are now going twenty five to
thirty dollars for a birthday present, but certainly we'd try
not to carry very many games that go over that
twenty five dollars.
Speaker 3 (16:28):
Kathleen says she's seen inflation effect just about everyone lately,
but it's been especially hard on younger families. In Washington, DC, we.
Speaker 9 (16:36):
Had tons of people in the store playing games and stuff,
but nobody was spending money, especially if they work for
the federal government. When they shut down the government, you know,
a lot of those people had to take loans to
just live. They're certainly not going to be spending on
games or puzzles like that's going to happen these days.
Speaker 3 (16:55):
When Kathleen looks at the toy business, she sees an
industry in disarray. She says, small board game makers, often
mom and pop businesses, have been hit especially hard by
the chaos. She's been caught in the tariff trap herself,
paying board game publishers for goods that have never arrived.
Speaker 9 (17:12):
They have my money. I have no games. Yes, there
have been multiple things that I've already paid for that
we're supposed to be here that aren't here because they
can't ship them from China because they don't have enough
money to pay the tariffs.
Speaker 3 (17:27):
The math on her own business is getting brutal, and
Kathleen says she's making a lot less overall.
Speaker 9 (17:34):
The prices have gone up, the margins have gone down. Basically,
it looks like our sales are up a little bit,
but our margins are down by two to three percent
across the board from this year this time to last
year this time. But we've also just said we have
to charge.
Speaker 3 (17:52):
More earlier this year. Trump made headlines when he suggested
the tariffs could mean fewer toys for American kids.
Speaker 1 (18:01):
Maybe the children will have two dollars instead of thirty dollars,
and maybe the two dolls will cost a couple of
bucks more than they would normally.
Speaker 3 (18:08):
Bloomberg's Brendan Murray says Trump and the White House are
using tariffs to safeguard an American way of life that
they feel is at risk, and higher prices for consumers
is a trade off.
Speaker 7 (18:21):
I think that's the administration's view, is that the American
dream is not built around the ability to buy things
as cheaply as possible. It's built around having a middle
class job where you can educate your children's and have
a home and live that sort of romanticized version of
what Americans considered to be a prosperous lifestyle. And President
(18:43):
Trump believes that's been lost and he's trying to regain that,
and tariffs are the main tool that is using to
do so.
Speaker 3 (18:56):
Back at Learning Resources headquarters in Illinois, Slinenberg says he
also wants to preserve the American dream that began with
his grandfather. His granddad started the business more than one
hundred years ago, and he and his children are running it.
But Rick's now facing a reality he never imagined. Chaotic
pricing the hibernation of products millions of dollars to move
(19:19):
his supply chain.
Speaker 6 (19:20):
And this is what happens for stops start, turn left,
turn right, yo yo here yo yo. There is my
life now.
Speaker 3 (19:29):
In this April, Learning Resources sued Trump, arguing that the
president doesn't have the constitutional authority to impose these taxes
without congressional approval. Rick calls it taxation without representation.
Speaker 6 (19:43):
I was pissed and the future of our company. You're
talking about over one hundred years of a family business,
which I see in the context of providing jobs to
thousands of people who live in the Chicago area since
nineteen sixteen and having a substantial impact on the community
I live in. I was not point to passively allow
(20:05):
this to be extinguished by politicians, and I thought this
was unlawful, so I sighed, sue.
Speaker 3 (20:13):
Suing the President of the United States isn't cheap. The
legal fees are likely to total millions of dollars, and
Rick's company is responsible for paying that bill. If Learning
Resources wins, it could get a refund of millions of
dollars in tariffs money that could restart those canceled product lines.
Speaker 6 (20:32):
But if it loses I can tell you that, in
my opinion, that is a horrific outcome that every American
should lose sleepover. It would affect people's faith in rule
of law. And if you doubt rule of law, you
also doubt whether your personal freedoms will be respected, and
(20:55):
the whole concept of the country unravels.
Speaker 3 (21:00):
The Global trade War has reshaped the world map, moving
factories from China to Vietnam, India and other emerging countries,
but the shock waves have also hit home in West Lafayette, Indiana.
Inside Dylan Bushar's living room, Dylan's daughter has autism and
for her, toys like number blocks aren't just playthings.
Speaker 5 (21:21):
It's comfortable for her.
Speaker 2 (21:23):
I don't know if that makes sense, but like if
she's overwhelmed, if she's you know, overstimulated, which is what
happens to her oftentimes, like number blocks will like calm
her heart rate. Now, like she'll set in my lab.
I'll hold her. I can feel her heart beating slower.
Speaker 1 (21:40):
You know.
Speaker 2 (21:40):
It's just it's something she's she knows and she's comfortable
with and she's learning.
Speaker 3 (21:47):
Dylan was able to make his own version of number blocks,
but he knows not every family has that option. For some,
the choice comes down to a twenty five dollars toy
or putting food on the table. And while he sidesteps
expense by three D printing sum toys, Dylan says the
decision to wage tariff wars weighs heavily on families like his.
(22:08):
He can see the impact of tariffs just by looking
at his plans for the holidays. Things are going to
be a lot less Christmasy this year.
Speaker 2 (22:16):
For the girls because we spent the same amount of
money as we always do.
Speaker 5 (22:21):
We just have less stuff.
Speaker 2 (22:23):
You know, it's still going to be Christmas more, He's
still going to be presents to open, but it's noticeable
what a dollar is going.
Speaker 5 (22:30):
To buy you.
Speaker 3 (22:31):
So it sounds like there's going to be less presence
underneath the Christmas tree this year, even though you're spending
just as much.
Speaker 2 (22:36):
Yeah, we didn't need to start a second ring around,
Like you know, there's no stacking. It's just a it's
a donut, so there's no there's no third dimension to it.
Speaker 3 (22:55):
This is the big take Asia from Bloomberg News. I'm Wanha.
We followed learning recent sources from the factory floor in
Vietnam and India to the Supreme Court. You can listen
to the full series wherever you get your podcasts. The
show is hosted by Me, David Gura, and Sarah Holder.
The show is made by Aaron Edwards, David Fox, Jeff Grocott,
(23:16):
Eleanor Harrison Dengate, Patty hirsh Rachel Lewis, Krisky, Katie mcmurranmi Um,
Julia Press, Tracy Samuelson, Naomi Shaven, Alex Sugiia, Julia Weaver,
Young Young and Taka Yasuzawa. To get more from the
Big Take and unlimited access to all of Bloomberg dot com,
subscribe today at Bloomberg dot Com Slash Podcast offer. Thanks
(23:39):
for listening. We'll be back on Monday.
Hosts And Creators
Sarah Holder
Saleha Mohsin
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