Toys created by Matal, Hasbro and others are seen in a masi store in New York.
Staff | Roots
There is trouble in Toyland.
Toy veteran Metal And Hasbro President Donald Trump has seen his shares by increasing trade war with China.
On Friday, Mattel stocks hit the bottom of a new 52-week Intrade of $ 13.95, down 27% Trump announced his aggressive and far-reaching “mutual tariff” policy last week. Rival Hasbrow’s shares fell at a low-lying level of $ 49 on Wednesday, more than 20% in the same time period.
The toy industry is very much dependent on supply chains in China, leaving toy manufacturers at mercy of trade policy. Bank of America estimates that both Mattel and Hussbro are about 40% of their American products from China.
The toy stock is battered by the US-China business war.
Trump announced a levy on imports from dozens of countries last week, killing China with one of the highest tariff rates. On Wednesday, Trump reduced the rates for most countries that except China for 10% tariff, which he hit even more hard.
The current American tariff on Chinese imports is 145%. China has retaliated, implemented its levy of 125% on American goods.
The margin for toys usually occurs in high single digits, which means that companies have a very low vigi room to absorb the cost of these new fees. Hopefully toy companies will need to pass the entire cost of Trump’s tariff to the consumer through high prices on the shelf.
These price growth, which can see some toy product double in cost, corresponds with this year’s back-to-school season.
– Tom Rotuno of CNBC contributed to this report.
