MGA Entertainment, the maker of popular toys like Bratz and L.O.L. Surprise! Dolls, is set to move 40% of its production from China to India, Vietnam, and Indonesia within the next six months. Currently, only 10-15% of its manufacturing is outside China. CEO Isaac Larian confirmed that the company is accelerating this transition due to ongoing trade tensions between the US and China.
Impact of US Tariffs on Toy Makers
Amid escalating tariffs imposed by the US government, major toy suppliers to Walmart and Target are adjusting their strategies. Even after MGA’s shift, 60% of its production will remain in China. However, the rising costs of China-made goods may force the company to increase wholesale prices, which will ultimately affect consumers.
Wider Effects on the Toy Industry
The trade war is pushing multiple US toy companies to reconsider their dependence on Chinese manufacturing. Mattel, the maker of Barbie, has announced plans to close a factory in China by 2025 and diversify its supply chain, ensuring no single country contributes more than 25% of its global production. Similarly, Hasbro has cited tariffs as a business risk, while companies like Beautiful Curly Me are exploring sourcing options outside China.
Rising Prices and Industry Adjustments
The Toy Association, a US industry group, warns that new tariffs could lead to price increases of up to 20%. MGA Entertainment, which sells 70% of its toys for under $15, fears that rising costs may push consumers toward cheaper, potentially unsafe alternatives. In response, some toy companies are seeking exemptions from tariffs, arguing that higher prices could drive demand for low-quality knockoffs.
Future of Toy Manufacturing
As the global toy industry adapts to economic and political shifts, companies are actively diversifying their production to reduce dependence on any single region. While China remains a dominant player, increasing tariffs and supply chain risks are pushing manufacturers toward alternative locations like India, Vietnam, and Indonesia.
