I have heard that purchases by Wal-Mart and Toys R Us of goods made in
China account for 20% of the trade deficit the United States has with
China.  Is there any truth to this observation?  If so, what is the source?

Hello.

Basically, yes, retailers like Wal-Mart and Toy R Us are indeed
responsible for a hefty chunk of the trade deficit with China.

"Wal-Mart is the biggest purchaser of China's goods, buying so much
that if the Bentonville, Ark., retailer were a country, its $12
billion in imports would have made it China's eighth-largest trading
partner last year, ahead of Russia and Great Britain.
...
Wal-Mart's trade with China is a one-way street, making the retailer
responsible for about 10 percent of the U.S. deficit with China."
source: Detroit Free Press, July 8, 2003
http://www.freep.com/money/business/trade8_20030708.htm

"If you want to know what's going on with the American economy,
Wal-Mart is the place to look. The growing trade deficit? Wal-Mart
imports $12 billion worth of goods from China, about 10 percent of the
US total."
source: Boston Globe,  8/17/2003
http://www.boston.com/business/globe/articles/2003/08/17/for_some_a_bad_dream_come_true?mode=PF

"U.S.-based Toys “R” Us, one of the world largest toy retailers,
spends about US$1 billion in China every year. Spurred by letters from
children asking how the toys are made, the company has developed a
Code of Conduct, does SWAT-team type checks and is increasingly
requiring its suppliers to implement the SA 8000 standard."
source: Business for Social Responsibily: "In a New Era, Made in China
Takes on New Meaning"
http://www.bsr.org/BSRResources/Magazine/CSRTrends.cfm?DocumentID=927

"Last year, the United States had a $103 billion trade imbalance with
China, equal to a fourth of its entire trade deficit for the year."
source: Pacific Business News:
http://pacific.bizjournals.com/pacific/stories/2003/09/01/daily39.html

Toys account for about 12% of the trade imbalance with China.

The U.S. imported a total of $12.2 billion in toys and games from
China in 2002.
source: Toy Industry Association.
http://www.toy-tia.org/industry/statistics/imports.html

Toys R Us sells about 16.5% percent of toys sold in the U.S.
source: Milwaukee Journal Sentinel,  Jan. 28, 2002
http://www.jsonline.com/bym/news/jan02/16126.asp

Thus, it's a pretty safe bet that toys sold at Toys R Us account for
about $2 billion of the trade deficit with China. That's about 2% of
the total trade deficit with China.
   

search strategy: 
"wal mart", imports, china, deficit
"toys r us", china, billion, imports
toys, china, "trade deficit"

I hope this helps.

Helpful.  Thanks.