Trump's tariffs could be 'catastrophic' for the toy industry
Tariffs have become a key policy focus ahead of President-elect Donald Trump's return to the White House. Like many other industries and consumer products, toys will be hard hit by Trump's tariffs if the incoming Trump administration were to enact these trade restrictions. The Toy Book editor in chief and The Toy Insider senior editor, James Zahn, joins Josh Lipton on Asking for a Trend to take a closer look at how the toy industry will be affected by Trump's tariffs. Tariffs "could mean some catastrophic results for the toy industry, especially [for] small to mid-sized companies. So some of what we've heard is a 50% to 60% tariff on products coming out of China. Now we're hearing maybe it could be a little bit lower. But anything is bad when you're talking about an industry that produces roughly 80%, 85% of its goods in China." Amid geopolitical tensions between the US and China, some toymakers have shifted their production to other countries. "Funko (FNKO) is probably in the best position because they make so much in Vietnam right now, but for the rest of the majors, you've got Jakks Pacific (JAKK), Hasbro (HAS), Mattel (MAT), [and] Spin Master (TOY.TO) making so much of their product [in China]. They have diverted some of it to these other countries: Vietnam is picking up a lot [as well as] Malaysia, [and] India want in on the action." Zahn finds the biggest problem for toymakers will be capacity: "They don't have the capacity to take on the level and the volume of production that's needed. And they also don't necessarily have the expertise to get that fit and finish the way that the manufacturers need for these products." To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. This post was written by Naomi Buchanan.
