TL;DR — we are being forced into a decision about raising our prices, we are not doing it right away but we will have to soon if things don’t change.

Hi Everyone,

The last few days have been harrowing to say the least, as we continuously experience the whiplash of Trumps unprecedented global tariff war. It’s mostly on pause for now except for goods being made in China. Le Puzz makes puzzles in China with a manufacturer that primarily makes books. They also happen to be incredible puzzle engineers! We love working with them and Le Puzz would not be Le Puzz without them.
 
As I am writing this the current threat coming from Trump is a 125% tariff on goods exported out of China and imported to the United States.

A tariff is a tax. Period. China does not pay the tariffs, they are paid by the person or business importing the goods (in this case Le Puzz). In our current situation, the 125% tariff is a tax on our manufacturing costs which Le Puzz will pay. It then becomes an expense that we have to contend with. This current percentage will more than double our manufacturing expenses. Basically, the United States government is taxing our puzzles because we make them in China.

One option is to raise our prices. Another option is moving our manufacturing to the United States, let’s talk about that. What would it take for a small business like Le Puzz to move manufacturing to the United States? The short answer is ... A LOT.

Here’s one example: A defining quality of Le Puzz is our custom random cut piece shapes. To make those Le Puzz designs and draws our own die lines that then get turned into a huge cookie cutter that is made specifically for the machines that we use in China to cut our puzzles out of paper. We could switch to a standard die (one that everyone else uses) but from the beginning we didn’t want to do that, that’s just not Le Puzz.

In short, this isn’t viable due to the overhead expenses and a lack of expertise in the United States. We would need to make them overseas and have them imported which means we face the tariff's again.

Wha, Wha …

In the weeds, our current die lines aren’t usable in the US as they don’t fit in the machines used here, we would have to have them custom made again. Die making is a skill that is mostly outsourced in the United States so to do this we would be making a new die in Poland or elsewhere costing upwards of 6K per die + a 20% tariff. We need between 5-6 of these to keep operations moving, so right out of the gate we have an investment of something akin to $35K just to get started. Die making is just one aspect of this process, there is also paper sourcing, paper quality, box quality, printing, bag sourcing, sampling and on and on and on. Relocating production to the United States as it stands right now is just plain expensive.

So … ugh.

All this to say … switching up manufacturers is a long process it could take over a year, in the end we risk ending up with a compromised product that’s more expensive than what we currently make overseas. Small businesses are being asked to take on ALL of this risk only to potentially have the tariffs lifted once Trump is done playing games.

Our current decision is to keep moving forward as we have been watching the tariff situation carefully and if we have to raise our prices later in the year we will have to. Hang in there everyone and thank you for reading this if you made it this far.

- Your pals at Le Puzz xo

For more indepth reading on how the Trump tariff war is effecting small businesses please read our friend Lisa Cheng Smith's analysis over at the Yun Hai newsletter, which includes this hilarious and very REAL image ... yikes y'all.