The Toy Aisle is About to Get More Expensive

The toy aisle is about to get more expensive. President Donald Trump expanded his trade war this week, placing a 10% baseline tariff on almost every country and much steeper levies on dozens of others. Among those hit with higher tariffs were China and Vietnam — two nations that are vital to the domestic toy industry.

Impact on the Toy Industry

For decades, U.S. toy companies have worked with Chinese manufacturers to bring the hottest action figures, dolls and games to retail shelves. Vietnam became a solid secondary market for companies looking to diversify their factory locations amid growing trade tensions between Washington and Beijing. Trump slapped China with an additional 34% duty Wednesday, bringing the total tax on goods from the nation to 54%, and hit Vietnam with a 46% tariff. The levy is far higher than what toy companies expected and could lead to massive price hikes on toys, industry experts said.

Reaction from the Industry

"Everyone is really in scramble mode," Greg Ahearn, president and CEO of The Toy Association, told CNBC. "This is going to have massive negative repercussions for the consumer and for our industry." Adding to the tensions, China is set to impose a retaliatory 34% levy on all U.S. products, its commerce ministry announced Friday.

Tariff Impacts on Toy Companies

Around 77% of toys imported into the United States come from China, according to data from The Toy Association. Vietnam is third, just behind Mexico. Trump previously placed a 25% tariff on goods from Mexico that aren’t compliant with the United States-Mexico-Canada Agreement. Hasbro and Mattel, leaders in the toy space, both incorporated a 20% tariff impact from China in their guidance projections for 2025 and had strategies in place to shift production to other countries, like Vietnam, Indonesia and India, all three of which were also hit with tariffs — 46%, 32% and 26%, respectively.

Financial Implications

"As a result, relocating production may not be financially viable," wrote Eric Handler, analyst at Roth, in a research note to investors published Thursday. "The consumer should soon see price increases to partially offset the tariff impact." Hasbro and Mattel report first-quarter earnings this month, and Handler said investors will likely see guidance cuts from both companies. Toy companies have already been slammed on Wall Street in the wake of the tariff announcement. Mattel shares fell more than 16.5% in Thursday trading, Hasbro lost more than 12% and Funko, which also has manufacturing in China and Vietnam, saw its stock plummet 18%.

Expected Price Increases

While Handler expects companies to try and lower costs through contract renegotiations with manufacturers and, perhaps, even altering packaging to improve margins, he said there is little doubt that consumers will bear the brunt of Trump’s duties. "You could have anywhere from 35% to potentially even a point-for-point price increase on products depending upon what margin those products run at," The Toy Association’s Ahearn said. "It may actually just be a 50% price increase, given it’s a 54% tariff." Most toy margins are in the high single digits, he noted. So, there is very little wiggle room for companies to absorb these fees.

Conclusion

The increased tariffs on Chinese and Vietnamese goods will have a significant impact on the toy industry, leading to higher prices for consumers. The Toy Association expects price hikes to coincide with this year’s back-to-school season. "There’s no place for it to go, but to the consumer," Ahearn said, noting that "The greatest budgetary impact on are the folks, unfortunately, who can afford it the least."

FAQs

Q: What is the main reason for the expected price increase in toys?
A: The main reason is the increased tariffs on Chinese and Vietnamese goods imposed by President Donald Trump.
Q: Which countries are most affected by the tariffs?
A: China and Vietnam are the most affected countries, with tariffs of 54% and 46%, respectively.
Q: How will the tariffs affect toy companies?
A: The tariffs will lead to higher costs for toy companies, which will likely be passed on to consumers in the form of higher prices.
Q: When can consumers expect to see price increases?
A: Price increases are expected to coincide with this year’s back-to-school season.
Q: Which toy companies will be most affected by the tariffs?
A: Hasbro, Mattel, and Funko are among the toy companies that will be most affected by the tariffs.

Boeing CEO Outlines Plan to Address Safety Concerns

Boeing CEO Kelly Ortberg testified before the Senate Commerce, Science, and Transportation Committee on Wednesday, outlining the company’s progress on improving its manufacturing and safety standards. The hearing comes after a January 2024 mid-air emergency involving a new 737 MAX, which left Boeing’s factory without key bolts installed.

Ortberg faced questions from lawmakers about how the company will ensure that it doesn’t repeat past accidents or manufacturing defects. Senator Ted Cruz, the committee’s chairman, invited Boeing managers and factory workers to report to him their opinions on the company’s turnaround plan.

Boeing’s Commitment to Safety

Ortberg acknowledged that Boeing still has more to do, but emphasized the company’s commitment to safety. "Boeing has made serious missteps in recent years — and it is unacceptable. In response, we have made sweeping changes to the people, processes, and overall structure of our company," he said. "While there is still work ahead of us, these profound changes are underpinned by the deep commitment from all of us to the safety of our products and services."

Improvements Across Manufacturing Lines

Ortberg and other Boeing executives have outlined improvements across the manufacturer’s production lines in recent months, including a contract worth more than $20 billion to build the United States’ next generation fighter jet. However, lawmakers and regulators have maintained heightened scrutiny on the company, a top U.S. exporter.

Federal Aviation Administration Oversight

The Federal Aviation Administration (FAA) capped Boeing’s production of its 737 Max planes at 38 a month following the January 2024 door plug blowout. The agency plans to keep that limit in place, though Boeing is producing below that level. Acting FAA Administrator Chris Rocheleau said at a Senate hearing last week that the agency’s oversight of the company "extends to ongoing monitoring of Boeing’s manufacturing practices, maintenance procedures, and software updates."

Conclusion

Boeing’s commitment to addressing safety concerns is a critical step in rebuilding trust with lawmakers, regulators, and the public. While the company still faces challenges, its progress on improving manufacturing and safety standards is an important step forward.

Frequently Asked Questions

Q: What is Boeing’s plan to address safety concerns?
A: Boeing CEO Kelly Ortberg outlined the company’s plan to improve manufacturing and safety standards, including sweeping changes to the company’s people, processes, and overall structure.

Q: What is the Federal Aviation Administration’s role in overseeing Boeing?
A: The FAA is responsible for monitoring Boeing’s manufacturing practices, maintenance procedures, and software updates, and has capped the company’s production of its 737 Max planes at 38 a month.

Q: What is Boeing’s production rate of 737 Max planes expected to be in 2025?
A: Boeing CEO Kelly Ortberg said the company could produce up to 38 737 Max planes a month this year, but would not push the production line if it’s not stable.

Political turmoil can have a significant impact on businesses and their employees. As the saying goes, “politics is local,” but the consequences of political conflicts can be felt globally. In this article, we’ll explore the effects of political turmoil on manager-employee relationships and provide insights on how to navigate these challenging times.

The Effects of Political Turmoil on Manager-Employee Relationships

When political turmoil occurs, managers must navigate the challenges of maintaining a positive and productive work environment. This can be particularly difficult for managers who are trying to balance the needs of their employees with the demands of the organization. Some of the effects of political turmoil on manager-employee relationships include:

• • Increased stress and anxiety: Political turmoil can create a sense of uncertainty and anxiety in the workplace, which can negatively impact manager-employee relationships.

• • Decreased morale: When employees feel uncertain about their job security, they may become more anxious and less productive, leading to a decline in morale and overall performance.

• • Communication breakdowns: Political turmoil can lead to a breakdown in communication between managers and employees, as employees may become less likely to share their concerns or ideas with their managers.

• • Increased turnover: Political turmoil can lead to increased turnover, as employees may feel the need to leave the organization to find more stability and security elsewhere.

• • Decreased motivation: Political turmoil can lead to decreased motivation, as employees may feel less motivated to perform their duties or contribute to the organization’s success.

Strategies for Navigating Political Turmoil

While political turmoil can be challenging for managers and employees, there are strategies that can help navigate these difficult times. Some of these strategies include:

Communicate Effectively

Effective communication is key to maintaining a positive and productive work environment during times of political turmoil. Managers should make a conscious effort to communicate clearly and transparently with their employees, providing regular updates on the organization’s plans and strategies.

Focus on Employee Well-being

Managers should also make a conscious effort to focus on employee well-being, providing resources and support to help employees cope with the stress and anxiety of political turmoil. This can include providing employee assistance programs, offering flexible work arrangements, and promoting work-life balance.

Build Trust and Empathy

Building trust and empathy with employees is also critical during times of political turmoil. Managers should make a conscious effort to listen to their employees’ concerns, empathize with their fears, and provide reassurance and support.

Conclusion

Political turmoil can have a significant impact on manager-employee relationships, leading to increased stress and anxiety, decreased morale, and increased turnover. However, by communicating effectively, focusing on employee well-being, and building trust and empathy, managers can help navigate these challenging times and maintain a positive and productive work environment.

FAQs

Q: How can managers effectively communicate with employees during times of political turmoil?

A: Managers can effectively communicate with employees during times of political turmoil by providing regular updates on the organization’s plans and strategies, being transparent about the impact of political turmoil on the organization, and providing resources and support to help employees cope with the stress and anxiety of political turmoil.

Q: What are some strategies for building trust and empathy with employees during times of political turmoil?

A: Some strategies for building trust and empathy with employees during times of political turmoil include listening to their concerns, empathizing with their fears, providing reassurance and support, and being approachable and available to answer questions and concerns.

Q: What are some ways to promote work-life balance during times of political turmoil?

A: Some ways to promote work-life balance during times of political turmoil include offering flexible work arrangements, providing employee assistance programs, and promoting self-care and stress-reduction techniques.