LEILA FADEL, HOST:
Two small businesses are already suing over last week's tariffs on products from more than 80 countries. One import tax of 10% expired on Friday, and the Trump administration put a new set in place ranging from 10% to 12.5%. So let's check back in with another small business that's been dealing with tariffs. Basic Fun! is a toy company that imports Lincoln Logs and other classic toys, mainly from China. CEO Jay Foreman is on the line with us. Good morning, and welcome back to the program.
JAY FOREMAN: It's good to be here on another Groundhog Day.
FADEL: Another Groundhog Day. That's how you feel this morning?
FOREMAN: Yeah, it's really amazing. You know, it makes me think about the quote from Randolph Hearst - you give me the pictures, and I'll give you the war. And the administration is basically saying, you give me a clause, and I'll give you a tariff war. And it's the third war now in the last 18 months we've been involved in.
FADEL: How has that been impacting you? I mean, you have one tariff out, another set in. What does that mean?
FOREMAN: You really can't set your pricing and you can't set your policy when you don't have a clear direction. And the starts and stops, of course, last year during Liberation Day was the worst of it all, when tariffs, at least on China, went up to 145% and interrupted our business for several months. You might be able to get the tariff money back, but you can't get lost sales back, lost momentum, the inventory that didn't ship and the lost profits. That's, you know, what we continue to deal with.
FADEL: Speaking of the tariff money, I mean, you told NPR's Scott Horsley a few months back that you applied for a $7 million refund for the tariffs you paid that the Supreme Court said were illegal. Have you gotten your money back?
FOREMAN: We have got most of it. We're still waiting for some. We're in the process right now. I think, out of $166 billion that was tariffed and paid by companies, at this point, actually, over 90 billion has been returned. I think another 10 or 20 is set to go, and the balance will go at some point. So the money is coming back. But like I said, you don't get the lost sales, you don't get the lost profit back. But it's certainly good to see justice, as slow as it grinds, it actually works, and the little guy actually won.
FADEL: So where does that money go that you've gotten back?
FOREMAN: Well, the money comes back into the company, into the business. We reinvest it into more inventory, we reinvest it into our employees, creating new lines, trying to continue to grow our business. In some cases, if we've charged surcharges or upcharges, we'll begin to return some of that money back to our customers. And the hope is that the ones that passed it along to consumers will find a way to return it to consumers, either in lower prices or specials or in some other way.
FADEL: I want to go back to these new tariffs. The administration says they're meant to punish countries that fail to prohibit forced labor. Are you satisfied with that explanation?
FOREMAN: No, I really think it's off base. I mean, first of all, 60 or 80 countries are all not issuing - involved in forced labor. And the other big problem that it poses is really taking a chainsaw to a problem that really needs a scalpel. And what happens when you go across the board is you really allow a cover-up of actual issues that are happening with forced labor in places around the world, when you just throw a blanket over everyone as opposed to going over specific and after specific cases of forced labor. This is just another way the administration decides to attack a problem with a huge wet blanket.
FADEL: Assuming these tariffs hold up in court, how different are they from what was in place last week? I mean, how much more could you be paying?
FOREMAN: Well, actually, so far, they're 10% and 12%. And what we're hoping is that they'll set up some exclusions for certain categories of merchandise that aren't really produced in this country, like toys. But it's slated to stay at 10% or 12%, which is about where we are right now, which means higher prices for consumers.
FADEL: Jay Foreman is president and CEO of the toy company Basic Fun! Thank you for joining us.
FOREMAN: You're welcome.
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