Former Target Corporation executive and Toys ‘R’ Us CEO Gerald Storch appeared on Fox Business Network’s Varney and Company on Tuesday to discuss the ongoing concerns surrounding President Donald Trump’s tariffs and their potential impact. Storch, who has decades of experience in retail, asserted that the fears surrounding tariff-induced price hikes have been “grossly exaggerated” and that the actual impact on consumers and businesses will be far less significant than many anticipate.
When host Stuart Varney asked Storch how he would handle a scenario where toys made in China saw price increases of 10 to 15%, Storch quickly dismissed the concerns. “Well, first of all, they’re not going to go up 10 to 15 or 20% in price,” Storch stated.
Storch pointed out that tariffs are applied to the cost of goods, not directly to retail prices. “You put a tariff on the cost of goods of 20%, it doesn’t mean the retail price goes up by 20%, not unless you can buy everything at a cost somewhere,” he said. He noted that the price increase seen in retail stores would not necessarily reflect the full cost of the tariff, as other factors, such as competition, product availability, and substitute goods, come into play.
Moreover, Storch drew attention to past experiences with tariffs during the first Trump administration when similar concerns were raised. Studies, he pointed out, showed that in the case of toys, 87% of the tariff increase was absorbed by Chinese manufacturers, not U.S. consumers.
“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,” Storch explained. He noted that many toys are now being manufactured in the U.S. as a response to the tariffs, suggesting that manufacturers are ready to adapt to the changing economic landscape.
He acknowledged that if price increases do occur, President Trump’s administration has shown a willingness to adjust and be flexible in response to economic realities. “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,” Storch concluded.
Overall, Storch’s remarks coupled with his professional expertise provide a compelling counter-narrative to the prevailing concerns about the consequences of the Trump administration’s tariffs. While acknowledging the potential for nominal price increases, he insists that both manufacturers and retailers have developed the resilience needed to navigate these challenges effectively. According to Storch, while the conversation around tariffs has been filled with anxiety and alarm, the actual impact on the toy industry and the broader retail market will likely be far more manageable.
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