Cold play: Toy industry faces ‘devastating’ impact from tariffs

Isaac Larian, CEO of MGA Entertainment, is facing significant challenges as tariffs imposed during the Trump administration threaten the toy industry and his company’s expansion plans. His factory in Ohio, which has been producing toys for over six decades and employs around 700 workers during peak season, is now on hold due to the high tariffs—rising to 145% on imports from China—making production costs skyrocket. Since approximately 80% of toys imported into the U.S. come from China, the industry is bracing for increased consumer prices, with many companies forced to consider passing costs onto shoppers. The tariffs have disrupted supply chains, particularly because much of the toy manufacturing relies on low-cost labor and specialized processes in countries like China, Vietnam, and Bangladesh, making automation and domestic production unfeasible in the short term. 

Major toy companies, including Hasbro, are trying to mitigate the impact through flexible sourcing and cost-cutting strategies, but smaller businesses are hit hardest; nearly half of them may close due to canceled orders and financial strain. The tariffs threaten around 700,000 U.S. jobs linked to toy design, marketing, and innovation, emphasizing the economic and social stakes beyond consumer prices. Experts warn that consumers will start feeling the pinch during the upcoming back-to-school season, with prices expected to rise and potential declines in sales. Critics, including Senator Bernie Sanders, condemn the tariffs, arguing they hurt working-class families and diminish childhood joy, while industry leaders and advocates call for policy changes to eliminate or reduce tariffs, emphasizing the broader impact on American jobs and the affordability of play. 

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Cold play: Toy industry faces ‘devastating’ impact from tariffs | Retail Dive