Toy Trouble: Mattel and Hasbro Stocks Plunge Amid Escalated China Tariffs

New York: The escalating trade conflict between the U.S. and China has sent shockwaves through the toy industry, dragging down the stocks of major toy manufacturers Mattel Inc. and Hasbro Inc. to new 52-week lows.

President Donald Trump’s announcement last week of sweeping “reciprocal tariffs” on foreign imports has hit China with the harshest penalties, intensifying fears for U.S. companies heavily dependent on Chinese manufacturing. On Friday, Mattel shares dipped to $13.95, marking a 27% decline since Trump unveiled the tariff plan. Hasbro, meanwhile, saw its stock sink to $49 per share, down over 20% in the same period.

China-Dependent Supply Chains Under Pressure

The toy industry has long been reliant on manufacturing in China, and that dependence is now being sharply tested. According to Bank of America, both Mattel and Hasbro source nearly 40% of their U.S. product lines from Chinese factories.

Trump’s tariff policy, which now imposes a 145% levy on Chinese imports, presents a major cost burden for toymakers already operating on thin margins. In retaliation, China has imposed its own 125% tariff on American goods, further escalating tensions between the world’s two largest economies.

“Margins in the toy industry typically sit in the high single digits,” said one industry analyst. “A tariff of this magnitude leaves virtually no room for companies to absorb the costs—they’ll have to pass them directly to consumers.”

Back-to-School Season Could See Price Surge

With the back-to-school shopping season approaching, consumers may begin to feel the pinch. Analysts predict that toy prices on store shelves could increase dramatically, with some products potentially doubling in cost due to the new tariffs.

This spike in prices comes at a critical time for the industry, as companies prepare for seasonal demand that peaks during late summer and the lead-up to the holiday season.

Retailers are already bracing for consumer pushback and reduced discretionary spending. The toy aisle—often a battleground for pricing and promotions—may soon reflect a stark shift in affordability.

Tariffs Complicate Global Trade Strategy

While Trump argues the tariffs are designed to bring manufacturing back to the U.S., industry insiders remain skeptical. Shifting production out of China would require massive capital investment, long lead times, and the re-establishment of complex global supply chains—none of which can happen overnight.

“It’s not as simple as flipping a switch,” noted a senior executive at a U.S.-based toy company. “These operations have been built over decades, and moving them comes at a massive cost—not just financially, but logistically and strategically.”

Despite reassurances from some companies about exploring alternative production hubs in Southeast Asia or Latin America, many fear the short-term pain may be unavoidable.

Investors Watch Closely

The market response has been swift. Investors have pulled back on toy stocks amid broader concerns that tariffs will hurt not just margins, but also long-term brand equity and consumer loyalty if companies are forced to scale back variety or raise prices.

“We are likely looking at a turbulent quarter ahead,” said a Wall Street strategist. “Mattel and Hasbro’s performance will now hinge on how they adapt to these tariffs—and how much consumers are willing to pay for a toy.”

With both sides showing no signs of backing down, and trade tensions between the U.S. and China reaching new highs, the toy industry finds itself in an uncomfortable spotlight—facing a holiday season filled with more uncertainty than cheer.