Core Insights - The U.S. toy industry is facing significant challenges due to increased tariffs imposed by President Trump, with a 10% baseline tariff affecting nearly all countries and much higher tariffs on China (54%) and Vietnam (46%) [3][5][6] - The tariffs are expected to lead to substantial price increases for consumers, with estimates suggesting potential hikes of 35% to 50% on toys [8][9] - Major toy companies like Hasbro and Mattel are already experiencing stock declines, with Mattel shares dropping over 16.5% and Hasbro losing more than 12% following the tariff announcements [7] Industry Impact - Approximately 77% of toys imported into the U.S. come from China, with Vietnam being a significant secondary source [4] - The tariffs are causing toy companies to scramble for solutions, including potential production shifts to other countries, but these alternatives are also facing tariffs [5][6] - Analysts predict that companies will attempt to renegotiate contracts and alter packaging to mitigate costs, but ultimately, consumers will bear the burden of the increased tariffs [7][8] Consumer Effects - The Toy Association anticipates that price hikes will align with the back-to-school season, disproportionately affecting lower-income consumers [9] - The industry's profit margins are already thin, making it difficult for companies to absorb the tariff costs without passing them on to consumers [8]