“It flings the door wide open for counterfeits and knock-offs”: The Toy Association’s Greg Ahearn talks tariffs

Greg, it’s great to chat. We’re talking on day three of New York Toy Fair, so thank you for making time. How’s it been for you so far?
It’s like Christmas morning – I love it! I’m a product junkie, I love a good booth, and I came on Wednesday because that’s the part I had never seen before. I’ve set up booths here and I’ve sold product here, but understanding the process of what it takes to put on a show like this… It’s monumental. The crates, the product, the walls, the signage, the electrics – the experiences team we have at The Toy Association is world class. It’s a sight to behold.

You hosted a press briefing at the show and the subject of tariffs was obviously a big talking point. The Toy Association is making the case that toys should be exempt from tariffs – and I imagine other industry bodies are looking to do the same for their sectors. What are some of the key reasons why toys should be exempt?
Well, the toy industry is different to any other industry. The first thing is that we’re all about kids, right? A toy in the hand of a child is a critical childhood development moment. Physical, mental, emotional development – and a well-rounded childhood – all starts with play. As an Association that represents our members on a global basis, anything that would provide any sort of roadblock for a toy getting in the hand of a child… Well, that’s something we want to make sure people are aware of and what the impacts of that are.

A 20% or 25% tariff – which is where we’re at with China, Mexico and Canada – and then the reciprocal tax tariffs that are proposed to be in place… We run a very short, tight margin business. The price points are $4.99, $9.99, $14.99, right? They’re your core price points and there’s not a lot of margin to work with there. And 96% of the companies here at a place like Toy Fair New York are small businesses – and many of them are family businesses. A 20% tariff on a small business in a very tight margin industry puts on immense pressure. Imagine a 20% increase on your mortgage or a 20% increase on your groceries. And with toys, that’s going to be passed onto the US consumer. It’s going to happen and we’re trying to make people aware of that.

The second thing relates to branded toys from companies doing things right. They’re manufactured ethically at the highest quality, mass produced and pass all of the safety testing. Well, when the prices go up on branded toys – and a 20% or 25% tariff will raise the prices on branded toys – it flings the door wide open for counterfeits and knock-off toys. They’re being sold through third party channels that are taking advantage still of the de minimis shipment.

De minimis being the value threshold below which imported goods are exempt from customs duties or taxes.
Yes – so small shipments through places like Temu and Shein. Non-branded toys pitched as lower priced alternatives that haven’t had to go through the testing. They haven’t had to do all the work that goes into putting out quality goods. It leaves the door wide open… Parents go on these sites and see something that looks like a branded product. They can’t tell the difference, but it’s got lead paint or it’s got small parts, or it hasn’t passed drop testing.

So the byproduct of a tariff is that is raises prices and moves the branded products into a higher price range. This means parents look for cheaper alternatives and buy unsafe products.

It makes the lives of legitimate toy companies harder – and makes life easier for the counterfeiters.
Exactly – and that puts children at risk. When we say that to people within the administration, we get a lot of heads shaking, so they understand. But we’re realists – we’re the toy industry. We’re not the electronics industry, right? We’re not a major company like an Apple or a Google, but we are important and unique as an industry.

Terrific insights, thank you. What is the key establishing a successful relationship between an association and a government?
We recently brought into the Kathrin Belliveau into the Association as Chief Policy Officer. Kathrin was a C-level executive at Hasbro and has an immense amount of experience in advocating safety, regulatory tariffs, trade policy – you name it, she’s covered it! She has been great for us, because it’s really all about relationships. It’s one of the things we in the US will have a focus on as an association. We are going to build that muscle up for ourselves, not only here in the US and Washington DC, but also on a global scale working with the heads of associations in other areas, be it China or the TIE or the UK.

It’s about having better, tighter relationships, so when something like tariffs comes along, we can band together as a coalition on a global basis and present as a unified force. That’s a major step as we think about the reciprocal tariffs that are happening right now.

The other thing to mention here is that we’ve also started things like the Toy Caucus. This is where we are signing up congressional leaders who want to represent the toy industry as part of a Toy Caucus. They agree with us about the importance of toys in childhood development and want to be a part of advocating for us, whether that’s on regulations, safety, tariff policy, trade policy… We have advocates on the Hill that we can easily reach out to and have consistent relationships and conversations with. We want to make sure they know everything that’s going on within the industry.

Great idea. And I imagine it’s something of a bit of a win-win for the politicians because toys connect with the public on an emotional level. Out of all the political hot potatoes they’ll dealing with, this likely stands out as an important cause that connects with everyone.
I’m sure that when their congressional aid shows them the agenda for the day, and it’s all these different associations… And then there’s The Toy Association – I will bet you everything in my pocket that it’s the best meeting of their day. I’ve been in many meetings on the Hill in my first nine months, and the first thing we do when we walk in the room is say: “We’re glad to be here, thank you for your time. Now, what was your favourite toy growing up?” It changes everything in the room. Sitting in the middle of their huge Washington DC office in the capital of the United States, they are transported back to their childhoods. It’s a great moment and they get the importance of what we do – and why we’re unique. I don’t think you get that with associations for kitchenware or US steel… It’s what Tom Hanks says in Big: “What’s fun about that?”

Ha! Absolutely. Before we wrap up, looking ahead for the rest of the year, what’s coming up from the Association that inventors and designers should look out for?
We’ve partnered with People of Play and it’s an exciting time. And I was once Head of Inventor Relations for a small company called OddzOn. I got to go through that experience of walking into the room, the inventor gets their prototype out and it’s magic. It’s magic. It’s the best – but it’s an area that the Association didn’t pay enough attention to, but we know it’s a cornerstone and the lifeblood of the industry. We talk about creativity and innovation. I get asked: ‘What’s gonna drive this industry for the next five years?’ I hear people saying AI and this and that… My answer: ‘Creativity and innovation.’ Product is king and that’s it, right? So, it’s about where does that show up and how can the Association show up in bigger and better ways.

Here at the show we have Creative Factor – and thank you for your participation in that Billy. We want anybody who is an advocate for creativity and innovation to be part of what we’re doing at the Association. So we have Creative Factor here and that’s open to all inventors. Then we have Mary Couzin, SVP at the Toy Association and Founder of People of Play. A good portion of what she does is around the inventor community and Mary will be doing some things within the LA Fall Preview that gather inventors together. And then we have POP Week – where 200 plus inventors and inventor relations representatives from all of the large and medium sized manufacturers gather in Chicago for a summit and pitching. That also encompasses the TAGIE Awards focused on celebrating innovation and creativity. It’s critically important.

Greg, this has been fascinating. Huge thanks again for taking the time to chat.

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