By Mark Seavy  

With foreign steel and aluminum imports named as the latest items set to be subject to U.S. tariffs, companies across a broad range of industries are scrambling to craft strategies to offset the rising costs. 

The difficulty largely stems from the potential range of products subject to the tariffs as well as the shifting timelines. The 25% tariffs threatened by President Trump to be imposed on goods imported from Canada and Mexico have been delayed a month while a 10% levy is being applied to goods from China. That 10% tariff will be applied to toys that arrive in the U.S. starting March 7th, Basic Fun CEO Jay Foreman said. Additionally, China announced its own 10-15% tariffs on items from the U.S. earlier this month. 

The escalating trade tension with China has made planning for the year a challenging task. Companies are focused on offsetting the tariffs across three fronts, including supplier concessions, shifting production, and potential price increases.  

“The incremental U.S. tariffs on goods from China has impacted our visibility, and while we have not yet fully factored their potential impact and our response into the following guidance, it will likely comprise a combination of actions,” Skechers CFO John Vandemore told analysts. The tariffs could result in a $200-million head wind against Skechers’ forecast for annual sales of $9.7-$9.8 billion this year, Vandemore said. 

While the recently announced round of tariffs on steel and aluminum could weigh heavily on sporting goods, the 10% levy on goods imported from China could lead to price increases in toys, particularly in the sub-$15 range, MGA International CEO Isaac Larian said. MGA sources products from nine suppliers in China, which accounts for approximately 80% of its manufacturing. The largest impact would be in the $1-$15 range that makes up to 50% of MGA’s sales against 30% for the overall toy industry, Larian said. MGA has 625 products priced in the sub-$15 range. 

Shifting production from China, which has been a source for toys for decades, has seen some manufacturing move to Vietnam, Indonesia, and India, but is a major change. While retail buyers placed orders for the year coming out of the recent Nuremberg Toy Fair, “price increases will have to occur immediately because we have no choice,” Larian said. 

“The 10% tariff is going to change the price elasticity, especially in an economy that is struggling,” Larian said. “If those $10 items are going to be $12 or $13, there are going to be fewer people buying them. They are not going to be predictable, but they are going to affect prices, and the consumer is going to end up paying for it. I am hopeful that once President Trump looks at toys, he will largely exempt them [from tariffs] like he did during his first administration.”  

If toys aren’t exempted from the tariffs, price increases will likely be imposed for Q4 orders arriving this summer and for those coming in 2026, Foreman said. Mattel, meanwhile, has included the tariffs’ potential impact in its financial forecast for this year and is “leveraging the strength of our supply chain and potential pricing,” CFO Anthony DiSilvestro said. 

In the case of goods imported from Canada and Mexico, tariffs would affect companies even a short distance from where the products are sourced.  

Cutting board supplier J.K. Adams, which sells products under its own brand and is a private label supplier for Williams-Sonoma and Crate & Barrel, uses trees grown in New York State and Vermont. But that wood is dried and milled in Canada, two hours from the company’s finishing plant in Dorset, VT, said Sharon Rishell, National Sales Manager at J.K. Adams. That would make the cutting boards subject to the 25% tariff if an agreement isn’t reached with Canada, she said. J.K. Adams implemented 38 price increases and decreases in 2024 across 250 items just to keep pace with the market, according to Rishell. 

“Our margins are tight anyway because we are trying to be competitive” Rishell said. “We try to be very thoughtful and only raise prices where we absolutely have to, but now I don’t know, and we will have to see.”