At last weekend’s four-day Toy Fair in New York, toy inventors, manufacturers, and retail buyers gathered to showcase and discuss the latest trends. Alongside the usual excitement about which toys would be popular for the holidays, another pressing issue took center stage.
Just days earlier, President Donald Trump announced plans to raise the additional tariff on Chinese imports to 20%. By the final day of the event, Tuesday, the answer was clear, and conversations turned to how the tariff increase would impact toy prices, with concerns mounting.
According to the Toy Association, which organizes the event, nearly 80% of toys sold in the U.S. are imported from China. In response to the impending tariff hike, many toy manufacturers are now in the process of renegotiating prices with retailers and re-evaluating their products to see where they can reduce costs.
Greg Ahearn, president and CEO of The Toy Association, predicted that toy prices, including for games, dolls, cars, and other products, could rise by 15% to 20% by the time the back-to-school shopping season arrives. He also noted that U.S. consumers generally expect to pay between $4.99 and $19.99 for toys, leaving limited flexibility for significant price hikes.
“It’s unsustainable,” Ahearn remarked, emphasizing that small businesses represent around 96% of the U.S. toy industry.
President Trump also moved forward with imposing 25% tariffs on products imported from Canada and Mexico this week. Some companies have shifted some of their manufacturing to Mexico to reduce costs by being closer to the U.S. However, on Wednesday, the president granted a one-month exemption for U.S. automakers from these tariffs on North American imports.
The uncertainty caused by Trump’s fluctuating statements and policies on tariffs has made it difficult for toy companies to plan effectively.
Jay Foreman, CEO of Basic Fun, explained that his company, based in Boca Raton, Florida, delayed shipping Tonka trucks, Care Bears, and other toys produced in China late last year because he was unsure whether the 60% tariff Trump had discussed during his campaign would actually be implemented.
“If you plan in a chaotic environment, you’re more likely to be wrong than right,” Foreman explained during an interview at his Toy Fair booth on Sunday. He noted that all of Basic Fun’s toy products are made in China, except for the K’Nex construction set, which is produced in the U.S.
After President Trump imposed an additional 10% tariff on Chinese goods last month, Foreman worked to persuade retailers to absorb some of the cost so he wouldn’t have to raise prices for consumers. However, with the tariff now doubling, he stated that he would have no choice but to increase the prices on many of his products.
For example, the price of a Tonka Classic Steel Mighty Dump Truck, which currently retails for $29.99, is expected to rise to $39.99 by the fall.
The Toy Association has worked hard to exempt the toy industry from the 10-25% tariffs imposed on Chinese imports during Trump’s first term. This time around, the group continued lobbying, aiming to inform Congress that toy manufacturers cannot replicate the specialized expertise found in Chinese factories.
Ahearn emphasized the advanced manufacturing and craftsmanship that has been developed over generations in China. The highly skilled and cost-effective labor force available there currently doesn’t exist in other countries, and it would take a similar amount of time to build this level of expertise elsewhere.
Some toy companies are exploring options to avoid raising prices.
Steve Rad, CEO of Abacus Brands Inc., a toy company based in Austin, Texas, said the company looked into switching to factories in countries like Cambodia or Vietnam. However, they found that those countries lacked the necessary skill set.
Instead, Rad plans to begin manufacturing one of its China-made products in the U.S. Abacus Brands found a factory in Texas that can produce Pixicade—an innovative product that turns doodles and drawings into playable video games—at no additional cost. The U.S.-made version is expected to be available in stores by August.
For his other, more complex toys, Rad doesn’t see it as practical to move production to the U.S. Instead, he’s considering whether he can reduce costs by eliminating some features from the products.
Foreman, from Basic Fun, mentioned that he plans to refresh his existing toys to make them feel new. For example, with Mash’ems—soft, water-filled collectibles featuring various licensed characters packaged in small cardboard boxes—he might alter the color of the box or switch to plastic containers instead.
Some retailers have already received notifications from toy suppliers about immediate price hikes.
Richard Derr, the owner of a Learning Express franchise in Lake Zurich, Illinois, and president of the 85-member Learning Express franchise council, expressed doubts about whether these suppliers are acting in good faith. He pointed out that many had rushed deliveries from China ahead of the tariffs.
Derr and other Learning Express franchisees are exploring alternatives to suppliers who suddenly want to raise prices.
He isn’t overly concerned about customers comparing toy prices to the previous year, as 65% of his products are new to the market.
“We’re in an era where things change quickly—one day it’s one thing, the next day it’s two,” Derr explained. “So releasing something now feels like preparing a stew that may not even be ready yet.”