If most people breathed a sigh of relief Wednesday when President Donald Trump paused some of the highest tariffs he had planned, Joe Novak wasn’t relieved at all. That’s because Novak, along with his wife, Whitney, is the owner of Kazoo Toys, an independent toy store on Roswell Road in Atlanta where 90% of the inventory, like 90% of all toys in America, are imported from China.
Even the French toys are made in China, he said, that’s the nature of the industry. But the president’s decision this week to impose a 145% tariff on anything entering the country from China could threaten the entire toy industry, including local toy stores.
Walking into Kazoo is like stepping into an 8-year-old’s candy-colored dreamscape. There are tiny pink tutus and a white, ride-along unicorn, sturdy yellow trucks and wooden trains and miniature kitchens. Novak’s favorite toys are Bruder trucks and the classic board game Trouble. “You can’t lose anything and you get to pound something,” he said with a smile.
The Novaks opened Kazoo in 2012, choosing a location close enough to walk to work where the business could also be part of their community. Although they considered opening a second store, COVID made them think better of the idea, so they remain a single-location, family-owned small business.
“The whole goal of all of this, we wanted to be ‘neighborhood,’ we wanted to be ‘family,‘” he said.
Along with running a favorite local shop, Novak has insight into Chinese-American trade since he worked for a series of large toy companies before opening Kazoo, including a two-year posting in Hong Kong. At the moment, he doesn’t see an easy off-ramp for the emerging trade war.
“Knowing Trump and knowing China, it’s just two guys saying, ‘Who has a bigger hammer?‘” he said. “Now it’s just a battle of wills. It’s hurting everyone, except for the two guys who want to win.”
On the morning Novak and I planned to meet, the tariffs on Chinese imports were set at 54%. By 2:00 that day, Trump had increased the number to 125%. On Thursday morning, the administration revised the tariff up to 145%.
For small businesses like Kazoo, the swings don’t just mean uncertainty; they also mean a potentially massive increase in the cost of products they buy from overseas, which are tariffed when they reach an American point of entry. With the cost of tariffs passed on to American businesses, those businesses then have to decide how much to absorb themselves and how much to pass on to customers.
“When the tariff was 20%, I expected it to be split among the customers, us and the manufacturers, so we all had skin in the game,” he said. “But now, I don’t know.”
Although nothing he’s selling today has been affected by tariffs, he thinks he’ll see the increased prices from distributors and wholesalers in just a few weeks.
Even his distributors don’t know how much they’ll be charging customers like him in coming weeks. When Novak asked one supplier how much a specific toy would cost him to order, she said, “I don’t know, it’s fluid.”
If Novak could buy more toys from America, he would, but there simply aren’t enough to fill up a toy store, not even close. “China has been developing its toy industry since (former President Richard) Nixon and ping-pong diplomacy,” Novak said.
Even with the ups and downs, Novak said COVID taught him that toys are often the last purchase a parent wants to forgo if prices are going up.
“Are you going to buy a new couch? No. A new printer for your home office? No,” he said. “But if you can put a smile on your kid’s face for $11, we’ll spend that.”
In the weeks ahead, more than just toy stores in Georgia will feel the stress from the Chinese tariffs, since stores that sell shoes, textiles, furniture, electronics and other consumer products import a significant amount of their inventory from China, too.
And Trump didn’t leave just Chinese tariffs in place. Also in effect are tariffs on steel and aluminum imports, which are 25%, along with auto imports, auto parts, and a 10% across-the-board levy on everything else.
Georgia businesses, from craft beer makers to specialty manufacturers, are sounding the alarm that their operations could be in trouble.
“I can’t sleep at night. I don’t know what is going to happen tomorrow. I’m even afraid of turning on the news,” said Felipe Arroyave in Atlanta, who founded Spectrum International in 2017 to make custom contact lenses. “The pause doesn’t mean anything to us. It’s just more uncertainty in business.”
Arroyave was named the U.S. Small Business Administration exporter of the year in 2024. But now he says he doesn’t even know how much to charge for his contact lenses; he has no idea which tariffs will affect him or how, since he has to import all of this component parts.
As the stock markets have ripped up and down with news of the on-again-off-again tariffs, Trump and his team have said he’s focused on “Main Street, not Wall Street.” But it doesn’t get any more Main Street than Spectrum, Kazoo Toys, and the thousands of small businesses in Georgia that import or export some piece of their inventory.
“It’s not helping anyone’s business,” Novak said. “No one’s going to win from this.”
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