By Mark Seavy  

Major or immediate changes are not expected in the licensing industry despite the U.S. Supreme Court’s striking down President Trump’s emergency order implementing tariffs.  

That’s largely because the administration was quick to deploy a new 15% global tariff on February 21. And while that was an increase from the 10% published by the U.S. Customs and Border Protection agency a day earlier, it was down compared to earlier levies. The new rate is a substantial decrease from the 145% rate initially imposed last April on goods imported from China (which fell into the 20-30% range as the year progressed).  

Boston America Corp., which supplies licensed beverages and candies, was already paying a 5.6% tariff on Chinese imports when the levies were first increased in 2025. The tariffs the company pays rose to 61% but dropped to 41% following the Supreme Court decision, Boston America President Matthew Kavet said. Boston America, which has absorbed the increased costs, typically prices its products at $2.99-$3.99 for products sold through retailers like Five Below and Hot Topic, he said.  

“It is very difficult to run a business this way,” Kavet said. “We ate the tariff costs last year, so our margins took a massive hit, and we will see what is going to happen now. Our profitability in the business is way down but there is a certain point where if we increase prices too much there is going to be pushback from the retail buyers and the consumers in the stores. People may not be willing to pay $6 for one of our items and $2.99-$3.99 is the magic price point for our product.” 

Jakks Pacific, meanwhile, incurred $12 million in tariff-related costs last year tied to the production of its toys and costumes, Jakks CFO John Kimble told investors. Jakks’ retail customers, which include Walmart and Target, paid almost $50 million in free-on-board (FOB) costs last year for Jakks products imported directly from China, money that otherwise would have “generated revenue” for the toymaker in other years, Kimble said.  

Under FOB, the liability, ownership, and shipping costs transfer from the supplier to retailer. FOB resulted in a decrease in units sold from Jakks’ previous forecast as “customers understandably derisked their year,” he said. Jakks’ annual sales, which declined 17% in the year ended December 31, have stabilized “a bit” after taking a hit from “tariff shocks” in Q2 and Q3 in 2025, Kimble said. Jakks Q4 business benefitted from FOB shipments of toys tied to the upcoming The Super Mario Galaxy Movie (April 1), which led to a 19% increase in quarterly revenue from action play and collectible items, he said.   

Other companies, like toy prop replica supplier The Noble Group, increased wholesale prices 7-8% last year, but have no plans to do so again this year, The Noble Group Senior Vice President Julian Montoya said.  

There has also been pushback from shareholders of publicly traded companies.  

David Tepper’s Appaloosa Management investment firm, which owns 5.5 million shares of Whirlpool, said the appliance maker hasn’t been doing enough to leverage the tariffs through strategic partnerships or through full or partial mergers with foreign competitors. Whirlpool incurred $300 million in tariff-related costs last year despite making many of its products in the U.S. The costs were tied to importing raw materials and components from overseas, a decision that impacted the company’s gross margins by 2.5%, according to Appaloosa. 

While licensees report little in the way of tariff-related concessions on royalty rates or minimum guarantees from licensors, there have been moves from agencies. A handful of agents have reported allowing licensees, on a case-by-case basis, to deduct the costs from net sales before a royalty is paid. 

But there remains a high degree of uncertainty even after the High Court’s decision. That stems from more than 1,000 lawsuits having been filed seeking a refund. Questions also remain as to whether any potential refund will be limited to companies that took legal action prior to the Supreme Court decision, the Jefferies firm said in a research note.  

The 15% tariff currently in place, filed under Section 122 of the Trade Act of 1974, is limited to 150 days and any attempts to restart it would likely face an “unfriendly reception from courts” without “explicit statutory reauthorization language,” according to Jefferies. There are other sections of U.S. trade law that the administration could employ, but most lack the broad application that was decided by the Supreme Court. 

“It may be too early to determine the aftermath of the Supreme Court decision,” a licensing executive said. “I am sure some manufacturers think they are getting refunds, but I highly doubt it. We shall see.”