Carle Place costume company, other manufacturers say they are harmed by tariffs on Chinese imports

A Carle Place company will reduce its employees' pay by 20% and forgo profit-sharing for the first time in more than 60 years because of tariffs.

Fun World designs and sells its Halloween costumes in the United States but they are made in China — and production costs have soared since the Trump administration imposed a 145% tariff on Chinese imports last month, CEO Alan Geller said Friday.

Faced with the unexpected expense, he also has delayed equipment purchases and even considered closing the business for good.

“The company has been profitable every year that it’s been in existence … This will be the first year that we will not make a profit,” Geller said. “If the sudden and extreme tariff [on Chinese imports] does not reverse we may close our doors permanently.” 

He said the higher tax, announced by President Donald Trump on April 9, has raised Fun World's estimated production costs to almost $100 million a year from $35 million. 

Geller on Friday joined executives from medical devices company NextVein in Huntington, bicycle manufacturer Worksman Cycles in Queens and mannequin supplier Bernstein Display in Manhattan to discuss how Trump’s tariff policy is impacting their operations. The event was organized by Rep. Tom Suozzi (D-Glen Cove) who said he had been contacted by the four men about the tax on products coming from China.

The U.S. Bureau of Economic Analysis and Census Bureau reported that China accounted for the second-most imports after Mexico last year, $440 billion compared with $516 billion. However, for most of the previous 20 years, China was the largest source of U.S. imports. 

Much of the debate over tariffs has focused on how they would spark price increases for consumers and product shortages. But the business executives said Friday the speed with which the China tariff was imposed is reducing employee salaries, scuttling expansion plans and, in some cases, causing companies to shut down.

Fun World, which has a factory in Pennsylvania, would like to make its costumes domestically, but it would take years to open, equip and staff new plants, said Geller, adding his business has about 200 employees with 85 based in Carle Place.

He and Suozzi both said the rapid rollout of the tariff has left U.S. manufacturers with little room to change how they operate.

Suozzi said he supports penalizing China and other countries for their unfair trade practices — but opposes the implementation.

"You have to have a plan and give businesses time to adjust," he said in front of a display of Halloween costumes at Fun World.

Trump, in unveiling the 145% tariff on Chinese imports, accused that nation of "ripping off" the United States for decades. He vowed to fund a Made in America initiative to increase U.S. manufacturing activity. 

At a Hauppauge factory last week, Kelly Loeffler, head of the U.S. Small Business Administration, said, "Thanks to President Trump's fair trade policy our supply chains will be the strongest in the entire world" because of increased domestic manufacturing.

In Carle Place on Friday, Roger Friedman, owner of Bernstein Display, said $8 million in orders for the company's mannequins and store display cases are up in the air because the 145% tariff adds about $6 million to the cost. 

"This would drive us out of business if this does not get resolved," he said, adding that Bernstein Display employs 70 people.

The executives' comments at Friday's news conference echo what local business leaders said they're hearing.

Matt Cohen, CEO of the Long Island Association, told Newsday the China tariff is "driving our manufacturers to make difficult decisions to remain financially viable as forces beyond their control threaten their bottom line."

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.