Rising Costs in the Toy Industry
The cost of toys and games is increasing at a record rate as the industry begins to feel the effects of President Donald Trump’s tariffs on China. While inflation remained stable last month at 0.1 percent, the price of toys, games, and playground equipment rose by 2.2 percent between April and May, according to data from the Bureau of Labor Statistics.
These figures reflect the period following Trump’s announcement of global reciprocal tariffs in April. Although the full impact of these tariffs has yet to be fully reflected in the data, experts warn that this is a worrying sign for the toy industry.
Tariffs on Chinese imports, which once reached as high as 145 percent, are currently set at 30 percent until mid-August. Nearly 80 percent of the toys sold in the U.S. come from China, according to The Toy Association, and the industry is preparing for the challenges ahead.
Isaac Larian, CEO of MGA Entertainment, which produces brands like Bratz and Little Tikes, told The Washington Post that inflation “is only just starting.” He warned of a domino effect: “You’re going to see prices go even higher,” Larian said. “You’re going to see empty shelves and a lack of innovation.”
Trump himself acknowledged that his tariffs could lead to higher prices or reduced inventory. “Well, maybe the children will have two dolls instead of 30 dolls,” he said in April. He also suggested that those two dolls could “cost a couple of bucks more than they would normally.”
Some toy manufacturers say they have no choice but to pass on the tariffs to customers. Scott Clarke, president of Douglas, which sells stuffed toy animals, told The Post, “We’ve absorbed some of the tariffs, but there’s only so much we can do. Ultimately, this is a tax on American businesses, and it’s the consumer that’s having to pay.”
Last month, Mattel, the company behind Barbie, Hot Wheels, Uno, and American Girl, was criticized by Trump for refusing to move its production to the U.S. – the ultimate goal of the president’s tariffs.
Ynon Kreiz, chairman and CEO of Mattel, told CNBC that it was unlikely the company would move production to the U.S. due to the tariffs, preferring instead to diversify production to other countries or simply raise prices on U.S. consumers.
“That’s ok. Let him go, and we’ll put a 100 percent tariff on his toy, and he won’t sell one toy in the United States, and that’s their biggest market,” Trump said.
Greg Ahearn, president and CEO of The Toy Association, previously stated that price increases of 15 percent to 20 percent are expected on games, dolls, cars, and other toys by the back-to-school shopping season.
The price range that U.S. consumers are willing to pay is anywhere from $4.99 to $19.99, leaving little room to raise prices, he said.
The Associated Press contributed to this report.
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