Hasbro warns toy prices to spike amid Trump tariffs
While Hasbro is yet to make any significant price hikes, its main international suppliers are based in China and Vietnam. The federal government slapped a 30 percent minimum tariff on China and under an agreement, Trump says the US will charge Vietnam a 20 percent tariff.
Cocks believes it's only a matter of time before the levies make an impact. 'I would expect if prices are going to be raised across the industry, the consumer will probably start to see them in the August through October timeframe, just based on the production timelines associated with toys,' Cocks revealed on CNN's The Assignment podcast. He explained that the production timeline for toys typically takes three to five months. The market was rocked in April when Trump imposed a minimum 10 percent tariff on US imports.
The stock market plummeted as a result , forcing the administration to issue a 90-day pause . The president has remained steadfast on applying pressure to manufacturers to make products in the US. Cocks told Cornish that although Hasbro has shifted it's supply to increase US-based production, it's easier said than done. 'If you took the same toy and manufactured it in the US, labor would make up 80 to 90 percent of the cost,' he explained.
Cocks said transitioning production to the US would require paying workers more due to American labor requirements. This would mean that consumers would have to pay more for products. For example, a doll typically sold for $10 would increase to $18. The federal administration has stood by the tariffs, claiming that foreign countries should absorb the costs. The economic policy was initially in line with Trump's 'America First' mentality, attempting to alleviate the country's reliance on foreign products.
Cocks said the reality was different, arguing, 'It's always a business working with another business that absorbs things.' Despite the tumultuous time for manufacturers, Cocks said since Hasbro relies on profits from it's gaming division, he's not too concerned about the company losing money due to the tariffs. 'I feel more for my toy industry CEO peers than I do necessarily for my day-to-day challenges,' he confessed.
Toy companies like Mattel have also admitted to feeling the brunt of Trump's tariffs , with the manufacturer detailing a grim prediction in its 2024 financial report . 'Changes in the amount, scope and nature of the tariffs in the future... could increase Mattel's product costs and other costs of doing business,' the report stated. 'Other changes in laws or regulations in the United States and/or in other major markets, such as China, in which Mattel operates... may also increase Mattel's product costs and other costs of doing business and in each case reduce Mattel's earnings and liquidity.'
Mattel manufactures almost half of its products in China and roughly another 10 percent in Mexico. China is responsible for a significant percentage of US imports, and currently has a 30 percent tariff from the Trump administration. The percentage has decreased significantly after Chinese products briefly faced tariffs as high as 145 percent. The future of trade negotiations remains uncertain as Trump pushed back the tariff pause to August 1.
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