Trump's Tariff Tide: America's Toymakers Brace for Impact

As the 2024 U.S. presidential election results solidify, one name stands out: Donald Trump. With his second term on the horizon, businesses across various sectors are bracing for the potential impact of his trade policies, particularly his tariff plans. The toy industry, a significant contributor to the U.S. economy, is no exception. This article explores the potential implications of Trump's tariffs on the toy market and how American toy manufacturers are preparing for the storm.

Trump's first term was marked by a series of tariffs on imports, including those from China and Mexico. His second term promises more of the same, with plans to impose additional tariffs on Canada and Mexico, as well as an extra 10% on goods from China. These tariffs could significantly impact the toy industry, which relies heavily on imports from these countries.



The global toy market was valued at USD 108.7 billion in 2023 and is expected to grow at a CAGR of over 5.8% from 2024 to 2032. However, Trump's tariffs could disrupt this growth trajectory. A study by Deutsche Bank suggests that a Trump victory would add about half a percentage point to U.S. GDP if tariffs are not implemented. Conversely, if tariffs are imposed, they could subtract about a quarter of a point from GDP. This could lead to higher prices for consumers and reduced profitability for manufacturers.



American toy manufacturers are taking note and preparing for the potential fallout. Companies like Hasbro and Mattel, which have a significant portion of their production in China and Mexico, are particularly vulnerable. They may need to adapt their supply chains, relocate production, or diversify their sourcing to mitigate the impact of Trump's tariffs.

One strategy is to pull shipments forward, taking advantage of the current lower tariff rates before the new ones take effect. Another is to incorporate "Trump Majeure" clauses into contracts, addressing the risk of additional tariffs. Additionally, companies can explore customs valuation planning opportunities and use Foreign Trade Zones to improve tariff efficiency.

Trump's tariffs could also impact the types of toys available in the U.S. market and their prices. For instance, his proposed 100% tariff on electric vehicles (EVs) made in Mexico by Chinese-owned companies could lead to shortages or reduced availability of these products. This could reshape the product offerings in the U.S. market and potentially drive up prices for consumers.

In conclusion, Trump's tariffs promise to stir up a ruckus in the American toy industry. While the full extent of the impact remains to be seen, toy manufacturers are taking proactive steps to mitigate the potential fallout. As the new administration takes office, the toy industry will be watching closely, ready to adapt and navigate the changing trade landscape.