Toymaker Challenges New Tariffs in Federal Lawsuit

Learning Resources, a toy manufacturer from Vernon Hills, is once more confronting the federal government in response to recent global tariffs. The company, alongside HMTX Industries, a flooring company from Connecticut, filed a lawsuit on Friday at the U.S. Court of International Trade. They are contesting the 10 to 12.5% tariffs imposed by the Trump administration on major trading partners due to alleged forced labor practices. The tariffs were invoked under Section 301 of the Trade Act of 1974, allowing the president to implement tariffs on countries deemed to engage in unfair trade practices. The Office of the United States Trade Representative cited forced labor within global supply chains among the top 60 trade partners, covering 99.4% of U.S. imports.

Elana Ruffman, Learning Resources’ chief marketing officer, expressed skepticism regarding the rationale behind the tariffs. She claims the focus isn’t truly on forced labor, but on raising taxes. Learning Resources had previously challenged Trump’s tariffs in April 2025, succeeding in the Supreme Court. This victory returned tens of billions to U.S. companies. The new tariffs replace a temporary 10% global tariff Trump enacted in February after the earlier tariffs were struck down for exceeding presidential authority without congressional approval.

The recent lawsuit alleges that the Trump administration aims to resurrect the same global tariff system under different statutes, but doubts the validity of the allegations regarding forced labor in the targeted economies. Ruffman believes the arguments are vague and lack specific proof of competitive disadvantage to American businesses. She argues that the true motive is revenue generation.

“They don’t actually prove out that there’s forced labor in the 60 economies that they’re targeting,” said Elana Ruffman to the Tribune. “They use very fuzzy language and fuzzy examples, not concrete specifics, as to why they believe this is creating a competitive disadvantage for American companies. It’s all a guise to raise money.”

In February, the Supreme Court ordered the government to refund around $160 billion in tariffs collected illegally from companies. Learning Resources has reclaimed about $10 million of the $12 million spent due to the past tariffs. However, studies reveal that tariffs have primarily cost consumers rather than companies, especially impacting states like Illinois and others in the Midwest. The Midwest Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois released a study showing that in 2025, tariffs increased Midwest household expenses by 55% more than the national average.

According to the study, tariffs added an average of $2,236 annually to the expenses of Illinois households, $2,586 in Indiana, and $3,158 in Michigan. The study also highlights a $18 billion contraction in the Midwest economy and a loss of over 41,000 manufacturing jobs, disproportionately affecting low-income families. Frank Manzo, co-author of the report, remarks that the 2025 trade war has posed significant challenges for the economy, with the Midwest suffering more than the rest of the nation.

Learning Resources, together with its sister company hand2mind, employs 500 worldwide and operates a 1.1 million-square-foot warehouse at their Vernon Hills headquarters. They produce educational toys like the Pretend & Play Cash Register and Kanoodle, outsourcing around half of their manufacturing to China. Despite past tariff costs, the company maintained pricing and adjusted its marketing budget to absorb expenses without layoffs in 2025.

In 2026, Learning Resources kept prices steady, sharing the rebated funds from illegal tariffs with customers. Ruffman explained this move as a way to return money to consumers. Beyond avoiding layoffs, the company is expanding with an EDGE tax incentive agreement with the state. Learning Resources is building a new 700,000 square foot facility in Vernon Hills to serve as the primary distribution center for hand2mind. This expansion includes hiring 37 new positions while maintaining 288 current ones. The state’s Economic Development for a Growing Economy program provides tax credits to businesses creating jobs and investments in Illinois. Ruffman anticipates the new facility will open by 2028.