With the toys in the U.S. market mostly made in China, the new tariffs leave U.S. toy brands with few choices but to share the burden with players in the industry's supply chain, including end consumers.

by Xinhua writer Liu Yanan

NEW YORK, March 14 (Xinhua) -- The U.S. toy industry with an annual retail sales of over 28 billion U.S. dollars is scrambling to cope with the extra tariffs imposed on goods imported from China.

With the toys in the U.S. market mostly made in China, the new tariffs leave U.S. toy brands like MasterPieces with few choices but to share the burden with players in the industry's supply chain, including end consumers.

Suzy Brown, a representative from the U.S. puzzle and games brand, was at the 2025 North American International Toy Fair when the extra 10-percent tariff imposed on imports from China by the administration of U.S. President Donald Trump took effect.

"We just found out today that there was another increase in the tariff and that's gonna affect us. It's gonna affect our customers, it's gonna affect retails. So it's scary," Brown told Xinhua during the four-day toy fair in New York which ended on March 4.

Brown, who covers the sourcing business of MasterPieces, said, "I'm sure it's on everybody's mind ... We're gonna have to pay the high tariffs as an importer."

The majority of MasterPieces' products are manufactured overseas, with several factories in China churning out products in long-term cooperation, according to her.

"Our prices have already been quoted to our customers, so we're now being hit by tariffs that we didn't anticipate," she said.

The timing of the new tariffs makes it more difficult to cope with additional costs at the beginning of the business season. Though a buffer was built in the pricing for 2025 in anticipation of trade tensions, it's not going to cover all of the extra tariffs, she added.

"We already have started to negotiate with our customers for the first 10 percent. Now we have another 10 percent," Brown said.

She expected higher retail prices due to the tariffs and described the process as a "chain reaction."

"Tariff is bad for toy companies, because in the end, nobody makes so much money (that) they can just accept it. So they have to pass it on to the consumer to the end, to the kids, the families," said Steve Reece, managing director of Kids Brand Insight, a toy business consultancy based in Britain.

Higher retail prices hurt consumption, production and American jobs, and tariff is a big problem for both manufacturing and consumption of toys, Reece told Xinhua on the sidelines of the toy fair.

U.S. retail sales of toys fell 7 percent in 2023 amid high inflation and haven't rebounded, according to data issued by The Toy Association.

"When you have someone who is not predictable, not solid, the problem is ... there's no way to manage this in a sensible way," Reece said, referring to U.S. policymakers' fast-changing stances.

"It's changing every day. So as we try to find solutions and solutions change," echoed George Balanchi, owner of Mindscope Products Inc., which supplies animated holiday decorations, inflatable decorations, stunt vehicles and others.

"Right now, everyone's holding position, wait and see for what comes next," Balanchi told Xinhua.

With all of its products manufactured in China, Balanchi said the company could probably absorb a little bit of the new tariff, and that retailers like QVC want to share the additional cost with it.

"It's only been one and a half months and (Trump) turned everything upside down. So we have to wait and see. In some cases, we can't wait. We have to produce goods now," lamented Balanchi.

"From what I look at, it's a problem. It's not a solution," said Reece, referring to the extra tariffs.

The United States is not set up to manufacture the way China is and "it's hard to find someone who does this type of manufacturing for us," Brown noted.

Given the long-standing relationships and mutual trust with partner factories in China, "we wanna try to continue that to the best of our ability," said Brown.

Around 80 percent of the U.S. market's toys are made in China, and only 1-2 percent in the United States, said Reece.

The share of domestically made toys would only go up marginally as it's not commercially viable to have the majority of toys made in the United States, commented the industry insider.