Learning Resources CEO Rick Woldenberg thinks the Trump administration’s sweeping tariffs will be catastrophic for both his family-owned toy business and for the broader U.S. economy. That’s why he’s suing President Trump.
Woldenberg’s business has 500 employees and sells thousands of learning-based toys like Spike the Fine Motor Hedgehog and the Pretend & Play Calculator Cash Register. Its lawsuit, filed Tuesday in the U.S. District Court in Washington, D.C., accuses Mr. Trump and other members of his administration of overreaching the president’s authority in imposing the broad-based import duties. Congress has historically held the power to authorize new tariffs or make trade deals with other nations.
With the administration’s higher tariffs in place, the math is dire for Learning Resources, Woldenberg said. The company’s import duties are set to increase from $2.3 million prior to the Trump administration to $100 million — a roughly 4,000% increase, he said.
“This path is catastrophic”
At the same time, Woldenberg said he expects his company’s sales to drop 25% this year as consumers scale back spending due to the economic impact of the tariffs. Prior to Mr. Trump’s trade war, the CEO had forecast an 8% increase in sales. Economists on Wall Street say the tariffs will slow U.S. economic growth while boosting inflation.
“This path is catastrophic,” Woldenberg told CBS MoneyWatch. “Forces have been unleashed in the economy — the world economy as well as the U.S. economy — that will have consequences that will be irreparable.”
Learning Resources’ suit asks the court to find that Mr. Trump’s tariffs are unlawful and to block the administration from collecting the levies. Based in Vernon Hills, Illinois, Learning Resources is a private, family-owned business founded in 1984.
The White House didn’t immediately respond to a request for comment about the suit or the company’s financial challenges caused by the tariffs.
Learning Resources
For now, Woldenberg said he’s focused on figuring out how to shift manufacturing out of China, where about 60% of his products are produced. Goods imported from that nation are now facing U.S. tariffs of 145%.
Because tariffs are paid by the companies that import the products, Woldenberg’s business — not China — is on the hook for paying for Mr. Trump’s high import duties.
One question facing Woldenberg is whether he can shift production out of China fast enough to keep ahead of Mr. Trump’s tariffs. In recent years, Learning Resources has added factories in India and Vietnam, but that effort has only moved the needle so far, he said.
“In a two- or three-year period we moved 16% of our product from China to those markets and got things going,” Woldenberg 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.”
Despite that effort, however, the company has to date moved only about 16% of its manufacturing capacity out of China to other countries, Woldenberg said.
Reshoring realities
Mr. Trump maintains that tariffs will revive the domestic manufacturing sector because the costs of the import taxes will spur both American and foreign businesses to reshore their factories to the U.S. But economists — and Woldenberg — are skeptical, pointing out that such a shift would require committing hundreds of millions, or even billions, of dollars to building and expanding U.S. factories.
“The fact that [Mr. Trump] believes in it is something that I think is irrelevant — there are people that believe in ghosts, OK?” Woldenberg said.
Learning Resources’ financial resources aren’t deep enough to build its own factory, Woldenberg said. He noted that he’s also tried to find plants in the U.S. that could make some of his products because he believed toys with a “Made in USA” label could appeal to some customers.
“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,” he said. “We can’t even find somebody to make six or 10 products.”
Learning Resources 
The reason, he said, is U.S. manufacturers don’t have the capability to make the types of products he’s selling, while the costs of manufacturing them himself would be prohibitive. “I cannot produce a factory that can produce our product at a competitive price,” Woldenberg said.
To be sure, some businesses have announced plans to build new U.S. plants or hire more workers in recent months. They include tech giant Apple, which in February said that it’s committed to spending more than $500 billion on expanding its U.S. manufacturing capabilities over four years.
But Apple “is in a different stratosphere than me,” Woldenberg noted. “They also have like a dozen products. We have 2,000.”
Skittish workers
Meantime, Woldenberg said he’s committed to keeping his 500 workers employed, likening the current challenges to those his business faced during the pandemic. Now, as then, his employees are worried about the impact of Mr. Trump’s trade war and whether their jobs might be at risk, he said.
“Two days before we were kicked out of our office in March of 2020, I had an all-company meeting and I said, ‘We define this as a community problem … the goal is to get everybody across the river.’ And we did that,” he said. “No one lost an hour of pay.”
Woldenberg added, “I have a very strong commitment to getting them through this, and it’s unwavering, and I’ll do everything that I can.”
Even so, Woldenberg wants to see the Trump administration drop their tariff plans.
“They should go back to the way things were on January 19th and figure out another plan. This one is not working,” he said.
