Key Points
- Shares of Mattel, Hasbro, Jakks, and Funko rallied after the U.S. announced a temporary reduction in tariffs on Chinese imports.
- The agreement pauses most tariffs and trade barriers for 90 days, slashing the 145% levy on Chinese goods down to 30%.
- The toy industry’s dependence on Chinese manufacturing makes it highly sensitive to trade policy shifts.
Shares of top toy manufacturers surged Monday following news that the U.S. government would temporarily ease tariffs on Chinese imports, a move that brought relief to an industry deeply reliant on Chinese supply chains.
According to F.M.I.E Sources, the agreement includes a 90-day pause on most existing tariffs and trade barriers, notably reducing the previously imposed 145% tariff on Chinese imports to 30%. This rollback represents a significant reprieve for companies heavily dependent on low-cost manufacturing from China.
Market reaction was swift:
- Mattel (MAT) jumped 10.21% (+$1.76)
- Hasbro (HAS) rose 6.57% (+$4.04)
- Jakks Pacific (JAKK) surged 15.42% (+$2.97)
- Funko (FNKO) soared a staggering 46.44% (+$1.63)
This rally lifted Hasbro’s stock above its early April levels—before former President Donald Trump announced sweeping “reciprocal tariffs” targeting several U.S. trade partners. While Hasbro rebounded strongly, other toy stocks are still trading below their April 1 closing prices.
Before Monday’s announcement, toy makers had faced intense market pressure, as investors braced for manufacturing disruptions and potential price hikes stemming from the previous tariff policy. The toy industry sources an estimated 40% of its U.S. product lines from China, based on data from F.M.I.E Sources and Bank of America.
Last month, Hasbro estimated a potential $300 million impact to its bottom line had the 145% tariff been enforced long-term. Mattel, similarly, issued a warning about mitigating actions it was implementing to offset the financial burden of the trade war, including raising U.S. retail prices.
Both companies had previously projected their earnings based on a 25% tariff assumption. However, Mattel withdrew its guidance earlier this month due to volatility and ongoing trade uncertainty. Hasbro maintained its existing full-year forecast but cautioned investors about the unpredictable nature of tariff policy.
Representatives from Mattel, Hasbro, Jakks Pacific, and Funko did not immediately respond to inquiries from F.M.I.E Sources.
As trade policy remains in flux, analysts say toy manufacturers will continue to navigate a delicate balance between cost management, pricing strategy, and global supply chain adaptation.