“I cannot produce a factory that can produce our product at a competitive price,” said Learning Resources CEO Rick Woldenberg.
The CEO of Learning Resources has filed a lawsuit against the Trump administration, alleging that a spate of recently-imposed tariffs will spell catastrophe for his company and other family-owned businesses across the country.
According to CBS News, the lawsuit was filed earlier this week on behalf of Learning Resources CEO Rick Woldenberg, whose company employs about 500 workers and sells learning-based toys like Spike the Fine Motor Hedgehog and the Pretend & Play Calculator Cash Register.
By his own calculations, Woldenberg believes that Trump’s tariffs will raise the cost of the company’s import duties from $2.3 million to about $100 million—an increase of about 4,000%.
“This path is catastrophic,” Woldenberg told CBS MoneyWatch in an interview. “Forces have been unleashed in the economy—the world economy, as well as the US economy—that will have consequences that will be irreparable.”
Waldenberg also said that abruptness of the tariff policy makes it extraordinarily difficult for companies like his to adapt. Learning Resources, for instance, manufactures many of its products in China. But with China the target of the administration’s most aggressive tariffs, Waldenberg believes his company will have to shift production to other countries, including India and Vietnam.
“In a two- or three-year period, we moved 16% of our product from China to those markets and got things going,” he said. “That took a lot of effort, cost us a couple million dollars, at least, in out-of-pocket expenses to move it from Point A to Point B, and a huge amount of man hours on our side to essentially redevelop all those products.”
Most of the company’s manufacturing capacity remains in China, with Woldenberg saying that companies like his simply cannot afford the cost of shifting manufacturing to the United States.
Woldenberg said that he has tried to find domestic plants—in part because he believes toys branded with a “Made in USA” label may sell better—but can’t find any factories willing to make products.
“If we had six to 10 products that were made in America, we could go and say, ‘Look! Made in America. You want made in America? Here’s Made in America,’” Woldenberg told CBS. “We can’t even find somebody to make six or 10 products.”
Woldenberg said that US manufacturers no longer have the capability or desire to make products like his. Aside from that, manufacturers in the United States will require far larger investments—investments that many small businesses don’t have the capital to make.
“I cannot produce a factory that can produce our product at a competitive price,” he said.
In court filings, attorneys fort Woldenberg accused the president and members of his administration of overstepping their authority.
Sources
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