Mattel and Hasbro Want Tariff-Free Toys—But They Could Benefit From Tariffs, Too

Hasbro and Mattel have joined the toy industry in fighting tariffs that could cost them millions. But there could be some trade-policy upside for the domestic toy giants.

Nearly 80% of toys sold in the US come from China, which is subject to a minimum import tax of 145%. But Hasbro (HAS) and Mattel’s (MAT) manufacturing is less concentrated there. If tariffs strain their competitors, the two companies may play a bigger role in stocking toy stores, J.P. Morgan analysts wrote in a research note Tuesday.

“Independents could be either priced out of the market or made insolvent,” they wrote, leaving Mattel and Hasbro “positioned well to fill retail shelf space,” they said.

Companies Urge No Tariffs on Toys

Mattel, the company behind Barbie and Hot Wheels, and Hasbro, which sells Play-Doh, Furby and the board game Monopoly, have been shifting production away from China for years. About 20% of Mattel’s imports hail from China, and it aims to bring this down to 10% by 2027, executives said on an conference call Monday.

Mattel aims to counteract the $270 million cost of tariffs in 2025 by relocating manufacturing, making other production shifts and raising prices, executives said. Mattel’s relatively diverse supply chain gives it a “competitive advantage,” CEO Ynon Kreiz said, adding that the company is still “calling for zero tariffs on toys.”

Mattel thinks limiting price increases may give it an edge, executives said. About 50% to 60% of its merchandise was available for $20 or less last year, and the company wants to keep about 40% to 50% of products at that price point, J.P. Morgan said.

“There is potential upside if there’s [product] shortages, generally, or opportunities to gain additional shelf space,” CFO Anthony DiSilvestro said, according to a transcript made available by AlphaSense.

Hasbro Expects Some ‘White Space’ on Store Shelves

About half of Hasbro’s toys and games in the US come from China, and Hasbro wants to shrink that to less than 40% by 2026, executives said last month. Hasbro CFO Gina Goetter acknowledged current trade policy may offer the company some advantages.

“With our retailers—the discussions that we’re having—we’re anticipating some [shelving] opportunities, and stepping into some white space,” Goetter said, according to a transcript made available by AlphaSense.

Tariff expenses may add up to as much as $300 million in 2025, but Hasbro thinks it can limit the hit to $180 million or less by diversifying its supply chain, changing its product lineup and cutting company costs, leaders said. Still, price increases are likely, Hasbro said.

The Toy Association has said that import taxes could result in supply shortages. The trade group last month called for “an immediate reprieve from tariffs” to ensure that toys are “available for the holiday season.”

Mattel said Monday it was “pausing” its guidance for 2025, citing a “volatile” economic environment; it had earlier predicted a rise of a few percentage points. Hasbro last month kept in place the 2025 projection of a slight increase in revenue it offered in February.