Puzzle people are used to putting pieces in their place. But the chaos of the Canada-U.S. trade war is flipping the industry over, leaving business owners to pick up the pieces.
“It’s the uncertainty. It’s nearly impossible to navigate,” Bruce Donnelly told Day 6.
Donnelly is the owner of Puzzles Canada, based in Georgetown, Ont. It’s one of the largest puzzle retailers in Canada, stocking 92 jigsaw brands and thousands of different puzzles. It ships thousands of them each week.
But the current trade war has taken a sizable piece out of those orders. And with continued uncertainty around tariffs, many puzzle retailers on both sides of the border are worried about the future of their businesses.
The Toy Association, a lobby group for the U.S. toy industry, surveyed 400 of its member companies in April. It found that nearly half of its small or medium-sized businesses were worried they may go out of business because of their government’s tariffs.
In March, Canada announced its retaliatory tariffs against Donald Trump and the U.S., which included a 25 per cent tariff on jigsaw puzzles made in the U.S. And Donnelly didn’t have a chance to react.
“We had shipments that were en route. We didn’t have a choice. We had to pay the tariff,” he said.
Not wanting to put the cost on his customers, Puzzles Canada paid the difference.
Even though Americans make up only 20 per cent of Puzzles Canada’s customer base, Donnelly says he’s feeling the impact. Half of the brands Donnelly sells are made in China, making them costly to send to U.S. customers.
Initially, the U.S. put a 145 per cent tariff on goods shipped from China. That has since been reduced to 30 per cent.
“We’re definitely [taking] a hit,” said Donnelly.
The company has had to make adjustments. He’s since had to halt shipments of made-in-China puzzles to the U.S., because those extra fees were just too high. He’s also had to increase the price for all customers of games from White Mountain Puzzles, Springbok Puzzles, and New York Puzzle Co., which are all U.S.-made, though he didn’t give an exact figure.
Donnelly is bringing in more puzzles from Europe, and he can continue to sell to customers in Canada. Even so, Donnelly says his U.S. sales could be cut in half.
And it’s not just companies in Canada that are struggling.
Mia Galison, owner of the eeBoo Corporation, is based in New York and sells jigsaw puzzles and children’s toys. But many of her products are manufactured in China.
“It’s devastating. We are a very small company. We don’t work on huge margins,” said Galison.
“We’re hoping that some reason prevails with these tariffs or that we get some kind of carve-out for small businesses or carve-outs for the toy industry.”
To make ends meet, Galison has also increased the prices of her puzzles. Even with the increase, she’s trying to keep them under $25 US each, but says it’s not enough to make up for the cost of tariffs.
It’s not just puzzles that have been caught in the crossfire of the trade war. Other seemingly odd U.S.-made products, such as toilet seats and bowling balls, have been slapped with retaliatory tariffs by the Canadian government. But why?
The Canadian government hasn’t provided an exact explanation for each product on that list, but international lawyer Lawrence Herman says those measures were put in place to inflict maximum pain on the United States.
“These items are carefully designed to ensure that they affect companies, producers, exporters in areas where U.S. politicians may be influenced by the effect,” Herman told the Cost of Living.
“A company in one or another area that is affected by these Canadian tariffs would complain to its senator or to its member of Congress, asking for the tariffs on Canada to be removed. That’s the whole idea behind these lists.”
In the meantime, Herman says Canadian companies will have to look to ship to other markets, such as Europe and the Asia-Pacific region.
One of the solutions could be to shift manufacturing from China to the U.S. or Canada. But Galison of eeBoo says that isn’t an easy pivot. She says it would take her company decades to develop its own manufacturing in the U.S. that would produce puzzles at the quality she’s looking for. And she can’t afford such an endeavour.
For Galison, it’s not just a matter of a slight downturn in profit. She worries her business, and many others, might not make it to the end of the year.
“Empty shelves are kind of an unpleasant image when you think of it,” said Galison.
“But a thousand times more unpleasant … is thinking of the truck drivers and the dock workers and the sales reps and the small businesses and the small business owners having no business anymore.”
