Pediatricians, vaccine costs, and confusion

Summary

Marketplace Morning Report: Pediatricians, Vaccine Costs, and Confusion Release Date: August 12, 2025

In this episode of the Marketplace Morning Report, host Sabri Benishore delves into the ongoing US-China trade tensions, their economic repercussions, and the specific challenges faced by pediatricians regarding vaccine procurement. The episode offers a comprehensive analysis of how tariffs influence various sectors and highlights the intricate balance businesses must maintain amidst fluctuating trade policies and public health demands.

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1. US-China Trade Truce Extended

[01:05] Sabri Benishore

The episode opens with an update on the fragile trade relationship between the United States and China. President Trump recently signed an executive order extending a trade truce, indefinitely postponing the imminent increase in tariffs. This suspension allows U.S. companies to import Chinese goods at the existing 30% tariff rate through the upcoming holiday shopping season. Had the reprieve not been granted, tariffs could have surged to triple digits, significantly impacting import costs.

Key Points:

• Tariff Suspension: The new deadline for tariffs is set for November 10th, providing temporary relief to U.S. businesses.
• China's Response: In retaliation, China has also delayed its plan to increase tariffs on U.S. imports, maintaining its current 10% rate.
• Trade Deficit Concerns: President Trump highlighted the significant trade deficit, which exceeded $295 billion last year, and has called on China to increase its orders of U.S. soybeans to mitigate this imbalance.

Notable Quote:

"The executive order Trump signed yesterday says the US continues to have discussions with Beijing to, quote, address the lack of trade reciprocity in our economic relationship."
— Nancy Marshall Genser, [01:26]

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2. Economic Indicators: Consumer Price Index (CPI) and Inflation

[02:27] Sabri Benishore

As the trade truce plays out, attention shifts to upcoming economic data, notably the Consumer Price Index (CPI), which serves as a critical measure of inflation. Since April, there has been speculation on whether tariffs are contributing to rising prices. While import data suggests that foreign suppliers are not significantly absorbing the tariffs, the impact on U.S. businesses remains a pressing question.

Key Points:

• Tariff Impact on Prices: There's an ongoing debate about the extent to which U.S. businesses are passing on tariff costs to consumers.
• Sector-Specific Effects: Certain categories, such as toys, have already experienced noticeable price increases due to tariff pressures.

Notable Quote:

"We know from import data that suppliers abroad have largely not been absorbing the tariffs. The question is how much are US Businesses absorbing and how much are they passing on to their customers?"
— Sabri Benishore, [02:27]

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3. Impact on the Toy Industry

[03:09] Savannah Peters & Terry Esper

The toy industry serves as a prime example of how tariffs are reshaping manufacturing and pricing strategies. Historically, about 80% of toys sold in the U.S. were produced in China. However, this figure is rapidly changing as major toy manufacturers diversify their production to countries like Vietnam and Indonesia to avoid steep tariffs.

Key Points:

• Diversification of Manufacturing: Companies are moving production to nations with more favorable tariff structures to maintain profitability.
• Price Sensitivity: With toys typically sold on slim margins, increased costs from tariffs are forcing retailers to adjust prices swiftly.
• Small vs. Large Retailers: While giants like Walmart and Target can absorb some tariff costs, smaller businesses like Color Wheel Toys in Albuquerque face significant challenges in maintaining competitive pricing.

Notable Quotes:

"The larger distributors and retailers may be able to weather these storms, if you will. It's the small to mediums that might have a hard time keeping their prices competitive."
— LHH Representative, [04:05]

"We're constantly kind of reevaluating pricing and trying to figure out which products customers will accept a markup on."
— Carrie Peel, Owner of Color Wheel Toys, [04:17]

Conclusion: The holiday shopping season is poised to be a pivotal period testing the resilience of toy retailers amidst the ongoing trade tensions. Professor Terry Esper emphasizes that this season will determine which businesses can withstand the financial strain imposed by the trade war.

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4. Challenges in Vaccine Procurement for Pediatricians

[06:05] Sabri Benishore

Shifting focus to the healthcare sector, the episode highlights the difficulties pediatricians face in ordering vaccines for the upcoming winter season. Plummeting demand and confusion over vaccine recommendations have disrupted the traditional procurement process, leading to financial uncertainties for medical practices.

Key Points:

• Reduced Demand: There's a noticeable decline in the demand for flu and COVID-19 vaccines, influenced by public uncertainty and evolving health guidelines.
• Financial Strain: Vaccines constitute about 25% of pediatric practices' operational costs. Unused vaccines due to over-ordering can result in significant financial losses.
• Insurance Coverage Confusion: A poll from KFF revealed that half of the parents are unsure about government recommendations for COVID-19 vaccinations for healthy children, affecting their decision to vaccinate.
• Risk Mitigation: Pediatricians are hesitant to order large quantities of vaccines, balancing the risk of overstocking against the potential need to cater to sudden increases in demand.

Notable Quotes:

"So small that sometimes it costs her more to buy and store the vaccines than insurance companies pay to put shots in arms."
— Stephanie Stevens, Pediatrician, [06:57]

"People are not ordering right now."
— Dr. Judith Grossberg, Pediatric Alliance, [07:44]

Conclusion: Pediatricians like Stephanie Stevens are adopting a cautious approach, placing smaller initial orders and only scaling up if there's an uptick in vaccine demand. This strategy aims to minimize financial risks associated with unused vaccines, highlighting the delicate balance healthcare providers must maintain in unpredictable economic and public health landscapes.

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Closing Remarks

The episode underscores the interconnectedness of international trade policies, economic indicators, and sector-specific challenges. From the ripple effects of US-China tariffs on the toy industry to the intricacies of vaccine procurement in pediatric healthcare, businesses and professionals are navigating a landscape marked by uncertainty and rapid change. As the holiday season approaches and winter health demands intensify, the ability to adapt and strategize effectively remains paramount for sustained success.

Sponsors:

• Yubico promotes the Yubikey, a tool for safeguarding personal and business accounts from cyber threats.
• Wix offers AI-driven website building solutions, enabling businesses to manage their online presence efficiently.

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Produced by Tamar Fagan, Arianna Rosas, and Erica Soderstrom. Senior Producer: Alex Schroeder. Supervising Senior Producer: Meredith Garrettson Morby. Reporting from New York.

Transcript

[LHH Representative]

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[Sabri Benishore]

An awkward truce continues from Marketplace. I'm Sabri Benishore in for David Brancaccio. The White House has again extended its trade truce with China. Yesterday, President Trump signed an executive order suspended spending higher tariffs that would have kicked in today. Marketplace's Nancy Marshall Genser has the latest.

[Nancy Marshall Genser]

The new tariff deadline is November 10th. This latest suspension will allow US companies to import Chinese products for the holiday shopping season at the current 30% tariff rate. Without yesterday's reprieve, triple digit tariffs would have snapped into place. China is also postponing higher tariffs for 90 days, keeping its import tax for US products at 10%. The two sides have been negotiating for months trying to reach a final agreement. The executive order Trump signed yesterday says the US Continues to have discussions with Beijing to, quote, address the lack of trade reciprocity in our economic relationship. The Trump administration says the U.S. trade deficit with China was more than $295 billion last year. In a social media post on Sunday, Trump urged Beijing to quadruple its orders of US Soybeans, saying that would substantially reduce its trade deficit with the US and but China would want something in return. I'm Nancy Marshall Genser for Marketplace.

[Sabri Benishore]

Today is a big day economic data wise. We get the Consumer Price Index a little later this morning. The CPI is one way we measure inflation in this economy and the big question since April is are tariffs showing up in prices? We have so far been able to piece together bits of data to get a clue. We know from import data that suppliers abroad have largely not been absorbing the tariffs. The question is how much are US Businesses absorbing and how much are they passing on to their customers? One category we are already seeing those prices get passed along. Toys, toy prices were up almost 2% in one month in June. Marketplaces Savannah Peters has more.

[Savannah Peters]

At the start of the year, it was Safe to say 80% of the toys sold in the US were manufactured in China.

[Terry Esper]

Right now, that number is very much so in flux.

[Savannah Peters]

Kylie Kohyu, an analyst with Jefferies, says the big toy makers are diversifying into countries like Vietnam and Indonesia, where tariffs aren't as steep as the ones President Trump has threatened. On Chinese imports, they're still higher than.

[Stephanie Stevens]

You know, the zero that they were before.

[Savannah Peters]

And because toys and games are made and sold on slim margins, higher costs are rippling through the sector on a faster timeline. Terry Esper is a professor of logistics at the Ohio State University. He says the Walmarts and targets of the world have more flexibility to absorb some tariff costs.

[LHH Representative]

The larger distributors and retailers may be able to weather these storms, if you will. It's the small to mediums that might.

[Savannah Peters]

Have a hard time keeping their prices competitive, like Color Wheel Toys, an independent shop in Albuquerque. Owner Carrie Peel imports a lot of her products from countries in Asia and the eu.

[Carrie Peel]

We're constantly kind of reevaluating pricing and.

[Savannah Peters]

Trying to figure out which products customers will accept a markup on, which ones to drop from our inventory and which ones the shop will just make less.

[Stephanie Stevens]

Money on if it becomes untenable.

[LHH Representative]

I mean, I'm prepared to like shut down my business. That's just the end of that.

[Savannah Peters]

According to Terry Asper at Ohio State, the holiday shopping season could be a test of which toy retailers can survive the trade war. I'm Savannah Peters for Marketplace.

[Terry Esper]

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[Wix Representative]

Running a business can be exhausting. Building your website shouldn't be. With wix, you can express your ideas, give direction, then leave the heavy lifting to AI. From site creation to branded content and images. Have fun with the details, customize what you want the way you want, and manage your whole business from a centralized dashboard with expert AI tools. Build, scale and enjoy the incredible results. You can do it all yourself on wix.

[Sabri Benishore]

Every year, pediatricians order vaccines ahead of time preparing for winter when we get all kinds of bugs in respiratory viruses. But plummeting demand and confusion about vaccine recommendations has thrown this process into disarray, forcing some doctors to gamble and sometimes to order vaccines they may not be able to use. Alex Olgan has the story.

[Stephanie Stevens]

This year, Denver area pediatrician Stephanie Stevens is taking a conservative approach to her seasonal vaccine order. She's starting out with a fraction of the COVID and flu shots that she bought last year. It's important for her to get the calculations right because the seasonal and childhood vaccines together make up a large part of her business costs.

[Carrie Peel]

Her vaccine costs are about 25% of the cost of running our practice. So that's a very, a very big part. And our margins are very small. So it really plays into it in a big way.

[Stephanie Stevens]

So small that sometimes it costs her more to buy and store the vaccines than insurance companies pay to put shots in arms.

[Carrie Peel]

I think our supply, I think our supply will be fine. I think it'll be more of a worry.

[Stephanie Stevens]

On the demand side, demand for flu and Covid shots has been falling over the last few years. But this year there are two new factors pediatricians are contending with. First is confusion. A poll from kff, a health policy research organization, found half of parents aren't sure if the government is actually recommending healthy kids get a Covid shot. They are not. Dr. Judith Grossberg runs the Pediatric Alliance, a group purchasing organization that helps practices across the country get their vaccines. People are not ordering right now, she says. The second reason is about coverage.

[LHH Representative]

They're waiting to see what's going to happen. Our insurance company is going to pay for Covid this year.

[Stephanie Stevens]

Insurers are only required to pay for the vaccines that the government recommends, ahip, an insurance trade group, said in a statement. It'll, quote, continue to support broad access to critical preventive services, including immunizations. In many states, pediatricians offices are the only places that babies and toddlers can get the vaccines. Pharmacies, where most adults go often can't give the shots to young kids. That's why, Grossberg says many of the pediatricians that she works with are taking a risk and ordering anyways. If they can't use all the shots, manufacturers will take some back. But, Grossberg cautions, you have to be careful.

[LHH Representative]

You don't want to end up with a lot of vaccine that you can't return.

[Stephanie Stevens]

That means that pediatricians like Stevens might have to eat the costs of unused shots.

[Carrie Peel]

Then. It really puts a huge financial strain on us as a small pediatric practice and a small business.

[Stephanie Stevens]

That's why she's starting out with small orders now. And if more parents end up wanting shots, then she'll order more. I'm Alex Olgan for Marketplace.

[Sabri Benishore]

Our producers are Tamar Fagan, Arianna Rosas, and Erica Soderstrom. Our senior producer is Alex Schroeder. Our supervising senior producer is Meredith Garrettson Morby. And in New York, I'm Sabri Benishore with the Marketplace Morning Report from APM American Public Media.

[Alex Olgan]

Running a business can be exhausting. Building your website shouldn't be. With wix, you can express your ideas, give direction, then leave the heavy lifting to AI, from site creation to branded content and images. Have fun with the details, customize what you want the way you want, and manage your whole business from a centralized dashboard with expert AI tools. Build, scale and enjoy the incredible results. You can do it all yourself on wix.