In a major trade negotiation breakthrough, US and Chinese economic policymakers have agreed to slash most of the high tariffs the two countries have recently levied against each other for 90 days. 

These reductions will go into effect on May 14, with US tariffs on imports from China dropping from 145% to 30%, and with China agreeing to a same-size decrease on US-made imports to 10%. US treasury secretary Scott Bessent says the recent tariff hikes have created an unsustainable trade blockage between the two countries, but both delegations are committed to resolving their disputes in further discussions. 

While this lays the groundwork to improve trade relations, the impact of the recent tariffs are already being felt in the consumer products industry. Major toymaker Mattel is rejigging its supply chain to reduce its dependence on China, relocating the production of more than 500 products to other countries. And the plan is to get the percentage of its toys that are made in China down from 40% to less than 10% by 2027. 

Elsewhere in toyland, Hasbro has issued a notice that it will suspend toy pre-orders on May 9 as it reevaluates market conditions. And Funko has emerged with a tariff mitigation strategy that will see the price of its core Funko Pop! collectibles increase from US$12 to US$15 in July. CEO Cynthia Williams adds that the company is also moving its manufacturing to other Asian countries, which will reduce US shipments from China from 33% to just 5% by the end of the year. And finally, Funko is implementing cost cuts to free up cash flow during these uncertain times, including laying off 20% of its workforce by the end of May. 

Leading into this year’s holiday shopping season, The Toy Association is urging the US government to grant “zero for zero” tariffs on toys to its global trading partners as a reprieve from the levies against China. This would give toys an essential-product status that recognizes the important role they play in childhood learning, development and creative play.