Toy Giant Moves Production Out of China Amid Rising Tariffs

MGA Entertainment, a major supplier to Walmart (NYSE:WMT) and Target, is accelerating its shift away from China due to escalating U.S. tariffs. The California-based company, known for Bratz and L.O.L. Surprise! dolls, plans to move 40% of its production to India, Vietnam, and Indonesia within six months, up from 10%-15% currently. CEO Isaac Larian stated that 60% of MGA’s manufacturing will remain in China but warned of potential price increases to offset higher costs.

The U.S.-China trade war, intensified by President Donald Trump’s recent 20% tariffs on imports, is forcing American companies to adapt. The Toy Association’s CEO, Greg Ahearn, predicted price hikes of up to 20% on toys sold at major retailers by the back-to-school season. Walmart and Target have not commented on the situation.

MGA initially aimed to shift 20%-25% of production but revised its plans due to the tariff impact. The toy industry, heavily reliant on Chinese manufacturing—where 77% of U.S. toys are made—is scrambling to diversify supply chains. Mattel (NASDAQ:MAT), producer of Barbie, is also reducing its dependence on China, closing all but one of its factories there by the end of 2025. The company aims to ensure no single country accounts for more than 25% of its production.

Hasbro (NASDAQ:HAS) acknowledged tariffs as a business risk in its latest report but has not disclosed relocation plans. Georgia-based Beautiful Curly Me is also seeking alternatives in Asia and South America.

MGA operates a factory in Ohio, but Larian noted that domestic production is too costly for labor-intensive toy manufacturing. As prices rise, industry experts warn consumers may turn to cheaper, potentially unsafe alternatives. Lovevery, a toy subscription service, has called for exemptions on toy tariffs to protect consumer affordability and safety.