Toys made by Mattel, Hasbro and others are seen at a Macy’s store in New York.
Staff | Reuters
There’s trouble in Toyland.
Toy giants Mattel and Hasbro have seen their stocks battered by President Donald Trump’s escalated trade war with China.
On Friday, Mattel shares hit a new 52-week intraday low of $13.95 apiece, down 27% since Trump announced his aggressive and far-reaching “reciprocal tariff” policy last week. Shares of Rival Hasbro fell to a 52-week low of $49 on Wednesday, down more than 20% in the same time period.
The toy industry is heavily reliant on supply chains in China, leaving toy makers at the mercy of trade policy. Bank of America estimates that both Mattel and Hasbro source around 40% of their U.S. product from China.
Toy stocks get battered by U.S.-China trade war.
Trump last week announced steep levies on imports from dozens of countries, hitting China with one of the highest tariff rates. On Wednesday, Trump lowered those rates for most countries to a blanket 10% tariff, except for China, which he hit even harder.
The current U.S. tariff on Chinese imports stands at 145%. China has retaliated, imposing its own levy of 125% on American goods.
Margins for toys are typically in the high single digits, meaning there’s little wiggle room for companies to absorb the cost of these new fees. Expectations are that toy companies will need to pass on the entire cost of Trump’s tariffs to the consumer through higher prices on the shelf.
These price hikes, which could see some toy product double in cost, is set to coincide with this year’s back-to-school season.
— CNBC’s Tom Rotunno contributed to this report.
