Toymaker CEO: I would have had to lay off employees if Sunday's tariffs were imposed
- Basic Fun CEO Jay Foreman says the company would have had to lay off 15% of its employees if an initial trade deal with China didn't work out.
- Washington and Beijing announce Friday they agree on phase one of a trade deal.
- The two countries have been in a trade war for 17 months.
Basic Fun CEO Jay Foreman told CNBC on Friday that the company would have had to lay off employees in the new year if an initial trade deal with China didn't work out.
"It would have cost jobs, profit and cost a real, real upset of our business and many businesses in the toy industry," Foreman said on "Squawk on the Street," moments after President Donald Trump confirmed additional tariffs won't be placed on Beijing.
The duties of 15% were set to take effect on Sunday and would have affected about $160 billion in Chinese-made goods including toys, phones, computers and clothing.
If the levies were implemented, Foreman said, about 15% of Basic Toys' U.S. workforce and a handful of international employees would have been laid off. The Florida-based company, which is behind Lincoln Logs and Connect Four, makes about 90% of its products in China and has been firm against moving its production chain.
Reports of a potential phase one trade deal began circulating this week, with sources telling CNBC on Thursday that a phase one deal had been reached between the world's two largest economies.
It was welcome news for Foreman, who said that at Thursday night's company holiday party, as reports seemed promising, he was able to tell employees that he was hearing a deal would be made.
"If tariffs were imposed, I could have been looking down from the stage at a group of my employees and a lot may be terminated after the first of the year, because these tariffs would have affected us so greatly," he said.
However, confusion ensued Friday morning when Trump tweeted that a report was "completely wrong, especially their statement on Tariffs."
Hours later, Washington and Beijing confirmed they reached a deal that included the tariff release, increased agricultural purchases and structural change to intellectual property and tech issues.
"We weren't sure if it was going to happen or not," Foreman said. "It was like 'Groundhog Day.'" A wild ride. But I really am happy to hear the president announce the phase one deal."