US-China tariffs and small tabletop games publishers in the US

The US government under Donald Trump has imposed, and made all sorts of modifications to tariffs measures, ostensibly to protect American companies, national security, among other reasons.

Similar to Brexit, the upheavals have created difficulties and challenges for companies big and small. The New York Times had an article a few days ago on the impact to the board/tabletop games industry in the US. In particular, the problems this is causing for those small companies in the US that rely on China manufacturing. These are some notes from the article.

The state of play

Many board and game companies in the US rely on Chinese companies to make the products they sell. They are essentially publishers who design the games and outsource production to Chinese companies, who manufacture according to their specifications.

These range from parts of the game to the entire product itself. Chinese companies provide bespoke card designs, figurines, packaging. Some of these products consist of many components, such as acrylic gemstones on figurines.

When the game publishers are so plugged into the global supply chain, tariffs and trade wars will inevitably cause havoc to their businesses.

Manufacturing & Supply Chain Woes

Production Halt: Some publishers were forced to stop manufacturing new games altogether. Japanime Games, for example, halted new production to focus on less expensive products like card games that can absorb the extra costs.

Delays and Lost Revenue: One company, Cephalofair Games, had $1.2 million worth of product held up at a Chinese port for two months due to the tariffs. These delays disrupt the supply chain, especially during the crucial holiday season, which can account for a large portion of a company's annual revenue.

Inability to Shift Production Domestically: Small companies can’t simply move their manufacturing to the U.S. because it presents nearly insurmountable challenges. Domestic alternatives are often several times more expensive and offer a lower-quality product. As one manufacturer pointed out, Chinese factories have the specialized materials and production sophistication—like molding custom acrylic gems—that American factories lack at the necessary scale. Suppliers would not be keen or refuse orders if they are below certain sizes, which is the case for small publishers.

Specialization and Scale: The more complex a game is, the harder it is to produce anywhere except in China. Chinese factories have the experience and supply-chain sophistication to handle the wide variety of materials and specifications required for modern board games, from different paper thicknesses to unique custom plastic components. This expertise is a key reason so many companies rely on them.

How Big Companies Fare Better

Large corporations like Hasbro (Monopoly, Clue) and Mattel (Uno, Pictionary) are better positioned to weather the storm. They have the scale to:

Diversify Production: They can accelerate efforts to move production out of China to other countries. This is a complex and costly process that is simply not feasible for a small, independent publisher.

Absorb Costs: Their significant profit margins and high-volume operations allow them to absorb the added costs of tariffs more effectively than small companies, which often operate on thin margins.

There are a couple of final points to take away from this.

Predictable environment: The constant changes to the tariff rates make it difficult for companies to plan. Businesses do not like a volatile environment. It makes it hard to anticipate demand, price their products, and get products to customers in a timely fashion

Small businesses suffer badly compared to bigger companies: This is a common problem everywhere. Similar to Brexit, when small and medium companies are hit disproportionately, bigger companies have the resources to deal with these tumultuous changes. This goes beyond merely moving production lines. They have the capability and resources to analyse the situation, and work out the best course of action for their businesses. Small scale businesses simply do not have these skillsets or resources to adapt so easily.