If your kid’s favorite toy seems flimsier and shoddier this Christmas — or if it comes without batteries, accessories, or extra features — you can thank the trade war.
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Toy companies are quietly reengineering their products in response to rising tariffs on Chinese imports, Reuters reported Thursday. Some are removing batteries from electronic sets, reducing accessories in doll kits and kitchen sets, or using cheaper magnets and less packaging to cut costs. And in at least one case, they’re literally cutting the number of plates in a playset from two to one.
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30% tariffs take bite out of toys
The moves come as President Donald Trump’s 30% blanket tariff on Chinese goods starts hitting U.S. companies in earnest. Eighty percent of toys sold in the U.S. are made in China, according to the Toy Association. For legacy players like Mattel and Hasbro, it’s already meant a dramatic hit. Mattel saw revenue decline 6% in the second quarter, the company said Wednesday, as retailers delayed orders, unsure of consumer demand amid economic uncertainty and rising prices.
Hasbro, also on Wednesday, announced a $1 billion non-cash impairment directly “triggered by the implementation of tariffs.” The hit came from within its Consumer Products segment. As a result, that segment’s adjusted operating profit only just cracked positive territory, as the higher costs, uneven demand, and retail order volatility weighed on performance — especially in North America and Latin America, where revenues dropped 23% and 26%, respectively.
Hasbro says it has “retooled and reimagined” classics like Candy Land and Operation to reduce costs. Other companies are opting to raise prices while stripping down products, per Reuters. Educational toymaker Popular Playthings pared back a planned “magnetic cake” toy — cutting features while raising the price from $29.99 to $34.99, an increase of nearly 17%. CEO Jason Cheung summed up the change bluntly: “The original item would have been better.”
A showdown in the toy aisle
These shifts aren’t just corporate belt-tightening. Because holiday orders are placed months in advance, many of the cutbacks are being baked into the toys arriving on shelves circa Christmas and into 2026. Which means this holiday season, the toy aisles at Walmart, Target, and online through Amazon may see the biggest confrontations yet between American consumers and White House trade policy.
Some companies are attempting longer-term shifts — like moving production out of China entirely — but such changes take time, often six to 12 months, as well as money. And not everyone’s convinced they’ll work. As MGA Entertainment CEO Isaac Larian warned Reuters: “Too much cost-cutting, destroys the play value for the toy, and you turn off the kids.”