Trump's New Tariffs Set to Drive Up Toy Prices Nationwide

President Donald Trump's expansion of his trade war this week has sent shockwaves through the toy industry, with experts warning that American families will soon face significantly higher prices for children's playthings. The administration has implemented a 10% baseline tariff on almost every country, with substantially steeper levies on key toy manufacturing nations.

Trump's New Tariffs Hit Hardest China and Vietnam

The new tariffs have particularly targeted China and Vietnam, two countries critical to the U.S. toy supply chain. China, which supplies approximately 77% of toys imported into the United States, now faces a staggering 54% total duty after Trump added an additional 34% tariff. Vietnam, which had become an important alternative manufacturing location for many toy companies, has been hit with a 46% tariff.

"Everyone is really in scramble mode," Greg Ahearn, president and CEO of The Toy Association, told CNBC. "This is going to have massive negative repercussions for the consumer and for our industry."

Limited Options for Manufacturers

Major toy companies like Hasbro and Mattel had anticipated some trade tensions in their 2025 projections, but nothing approaching the scale of these new tariffs. Both companies had included a 20% tariff impact from China in their guidance and developed strategies to shift production to other countries.

However, those alternatives have now been largely eliminated, with Indonesia and India also facing new tariffs of 32% and 26%, respectively. As Eric Handler, analyst at Roth, noted in a recent research report: "As a result, relocating production may not be financially viable."

Stock Market Impact

The financial markets have already reacted strongly to the news, with toy companies experiencing significant stock drops:

• Mattel shares fell more than 16.5%

• Hasbro lost more than 12%

• Funko, which also manufactures in China and Vietnam, saw its stock plummet 18%

Adding to the uncertainty, China announced Friday it would impose a retaliatory 34% levy on all U.S. products.

Consumers Will Bear the Cost

Industry experts are unanimous in their assessment that these tariffs will lead to substantial price increases that will ultimately be passed on to consumers.

"You could have anywhere from 35% to potentially even a point-for-point price increase on products depending upon what margin those products run at," Ahearn explained. "It may actually just be a 50% price increase, given it's a 54% tariff."

With most toy companies operating on high single-digit margins, there is little ability to absorb these additional costs internally. The Toy Association expects price hikes to begin appearing during this year's back-to-school shopping season.

Disproportionate Impact on Lower-Income Families

Particularly concerning to industry leaders is how these price increases will affect families with limited budgets. "The greatest budgetary impact on are the folks, unfortunately, who can afford it the least," Ahearn noted.

Curtis McGill, co-founder of Hey Buddy Hey Pal, which makes the Eggmazing Egg Decorator, expressed some hope that Vietnam might be more willing to negotiate than China, but the overall outlook for the industry remains challenging.

As toy companies report their first-quarter earnings this month, analysts expect to see significant guidance cuts that reflect the new economic reality created by these tariffs.