Gerald Storch, the former CEO of Toys”R”Us, isn’t buying the latest wave of tariff panic. In a recent appearance on Fox Business, Storch dismissed claims that tariffs on Chinese imports would result in steep price hikes for U.S. consumers, calling them “grossly exaggerated.”
“They’re only in the cost of the goods, they’re not in the price,” he said. “It doesn’t mean the retail price goes up by 20%.” According to Storch, previous tariffs mostly impacted Chinese manufacturers. When the Trump administration imposed tariffs on toys in the past, “87% of the increase was borne by the Chinese,” he explained.
Storch emphasized that China has every incentive to absorb cost increases to maintain market share.
“They have everything to gain and nothing to lose by keeping the sale,” he said, adding that some of that business will likely shift to U.S.-made or alternative products anyway.
Retailers Will Adjust
Storch believes that while tariffs might cause some disruption, retailers will adapt. “I think people are hysterical,” he said.
“The retailers are going to do just fine no matter what happens.”
He argued that even if costs increase slightly, it will be a shared burden across the industry. Labor and rent costs remain stable, so margins aren’t under the kind of pressure critics suggest.
If the economic effects become too severe, Storch is confident the administration will adjust. “President Trump and the group can be flexible and not do anything that’s really damaging,” he said.
‘Liberation Day’ or Trouble Ahead?
President Donald Trump is preparing to launch a fresh round of global tariffs on April 2, calling it a “Liberation Day” for the American economy.
However, many Republicans on Capitol Hill are sounding the alarm behind the scenes.
They fear that the new tariffs—referred to by the White House as “reciprocal tariffs”—could result in higher prices for consumers, hurt American farmers, and create instability in financial markets.
Lawmakers are pushing for exemptions for key industries and lobbying the administration to scale back some of the proposed measures.
“Tariffs in Kansas often are very harmful to agricultural producers, farmers and ranchers,” said Sen. Jerry Moran, R-Kan. “We need every market.”
Rep. Don Bacon (R-NE) echoed those concerns. “In the end, consumers pay more. And so it’s going to raise costs,” he said, warning that market access has already been lost in Europe due to tariff tensions.
Not Just Tariffs
The skepticism Storch expressed comes at a time when broader concerns about Trump’s economic policy are surfacing.
A CBS News poll released this week shows that most Americans think President Trump is focusing too much on tariffs and not enough on lowering everyday prices.
Just one in four respondents said his policies are making them financially better off, while nearly half said they feel worse off.
Even among Republicans, support has cooled. Before Trump took office, three-quarters of Republicans believed his policies would help them financially. That number has now dropped below 50%.
Meanwhile, back on Capitol Hill, GOP lawmakers are quietly trying to shield their states from the potential fallout of Trump’s next wave of global tariffs.
Many are lobbying for exemptions and carve-outs for agriculture and key industries, concerned that higher costs and retaliatory tariffs could devastate local economies.
Lessons From Toys”R”Us
Storch’s perspective on tariffs is shaped by firsthand experience. He led Toys”R”Us through turbulent times, and the company ultimately collapsed under the weight of changing market conditions and heavy debt.
A breakdown of the company’s financials showed that Toys”R”Us had a negative return on equity of -47.37% at the end. Two main problems caused its fall: a negative profit margin and a massive debt load, both of which amplified its struggles in a competitive market.
“Debt just multiplies whatever is happening with the other two values,” noted a Harvard Business School analysis. In short, when things went wrong, they went really wrong.
That context might explain Storch’s lack of panic over tariffs. In his view, retailers are far more resilient than critics give them credit for. “
The good companies are doing very well,” he said. “Walmart, Costco—I was there this weekend, the lines were so long just to check out.”
As for his favorite? “Costco,” he said. “If you buy something there, it’s going to be least expensive.”