Toy Prices See Unprecedented Surge As Trump Tariffs Take A Toll: 'There’s Just No Escaping China' - Mattel (NASDAQ:MAT)

Toy prices in the U.S. have hit record highs due to new tariffs imposed by President Donald Trump, impacting an industry largely dependent on Chinese imports.

What Happened: The price of games and playground equipment has seen a record 2.2% surge between April and May. This inflation rate is significantly higher than the 0.1% inflation for all items in the same period, according to the Bureau of Labor Statistics, reported The Washington Post on Tuesday.

More than 75% of toys sold in the U.S. are imported from China, leaving the industry especially vulnerable to the trade war sparked by the President, data from the Census Bureau shows. Some of the toys are also imported from South Korea, Japan and other European countries. Experts expect these price increases to persist in the coming months, as more manufacturers and retailers are forced to pass on higher costs to consumers.

Despite the tariffs on Chinese imports reaching as high as 145% this year, they currently stand at 30%, owing to a 90-day reprieve that is set to expire in early August. The Trump administration, which exempted the toy industry from the 25% tariffs on China during the first term, has not extended this exemption. The publication reported that the toy makers are swiftly increasing prices—by up to 36%—to counter the impact of tariffs.

Caroline Rodrigues, who owns toy shops in Los Angeles and Portland, Oregon, stated, "There's just no escaping China.”

Why It Matters: The imposition of tariffs on Chinese imports has been a contentious issue throughout Trump’s presidency. The toy industry has been particularly affected, with prices rising and consumers feeling the pinch. This is notable in the context of Trump’s prediction in May that children would “probably just do fine with fewer toys.”

Despite the tariffs, toy company Mattel Inc. MAT managed to beat analyst estimates for first-quarter revenue and earnings per share. The company is now preparing to raise prices ahead of Christmas, a move that could further impact consumers.

Trump’s tariffs have also affected other industries, such as the Chinese tech and EV stocks listed in the U.S., despite inflation data coming in softer than expected for May. This suggests that the impact of Trump’s trade policies is far-reaching and could have significant implications for the U.S. economy.

Over the past year, shares of Mattel surged 18.05%, as per Benzinga Pro.