MGA Entertainment CEO Criticizes Trump Tariffs Impact on Toy Industry Prices

This analysis is based on the Fox Business report [1] published on November 6, 2025, featuring MGA Entertainment CEO Isaac Larian’s criticism of President Trump’s tariffs on toy imports. The segment, titled “Why tax the children? Toy manufacturer CEO pushes back on Trump tariffs,” highlights the significant economic impact of trade policies on the toy industry and American consumers [1].

Larian’s central thesis is that “tariffs are taxes on consumers” [1], emphasizing that these trade policies ultimately burden American families rather than foreign governments. The CEO provided specific pricing examples: Little Baby Bum’s “Twinkle” doll would increase from $15 to $18-$19, while LOL Surprise Pet would rise from $7.99 to $9-$10 [2]. These increases represent 20-25% price hikes on individual products, consistent with broader industry projections of 35-50% price increases [3].

The manufacturing reality complicates potential solutions. MGA Entertainment, producer of Bratz dolls and L.O.L. Surprise toys, has more than half of its production in China, with the remainder distributed across Vietnam, Indonesia, and India [2]. The company maintains only one U.S. factory in Hudson, Ohio, accounting for approximately 20% of sales [2]. Larian noted that doll-making requires “very tedious work that is labor intensive,” and even domestic production would require “robots would have to do 90% of the work” [2].

The tariff structure creates substantial barriers: China faces an additional 34% duty (total 54% tax), Vietnam 46%, Indonesia 32%, and India 26% [3]. These rates far exceed industry planning assumptions and have already triggered significant market reactions. Major toy stocks plummeted following tariff announcements, with Mattel down 26% and Jakks Pacific down 25% [2].

The economic ripple effects extend beyond individual companies. LendingTree analysis projects $40.6 billion in additional costs for 2025 holiday shopping, with consumers bearing $28.6 billion (approximately $132 per shopper) [4]. The timing is particularly critical as tariffs were announced in April, disrupting planning for the crucial Q4 holiday season [2].

The toy industry’s dependency on Asian manufacturing represents a systemic risk. With 77% of U.S. toy imports coming from China [3], the sector faces unprecedented exposure to trade policy changes. Companies that diversified production from China to Vietnam, Indonesia, and India found their strategies undermined by expanded tariffs [2][3].

Toy industry margins typically run in high single-digit percentages [3], leaving minimal capacity to absorb tariff costs. Companies face a difficult choice between absorbing costs (damaging profitability) or passing them to consumers (reducing demand). This pressure is particularly acute for smaller companies, which The Toy Association warns face potential closure [3].

Larian’s criticism is noteworthy given his previous support for Trump’s first-term tax cuts [2]. His current opposition reflects growing business sentiment that trade policies may be counterproductive to domestic economic goals. The Toy Association has been “aggressively advocating for a tariff exemption for toys” [5], indicating industry-wide concern.

The tariffs create a perfect storm of economic pressure. Price increases expected during the back-to-school season could reduce holiday spending power [3], potentially creating a sustained negative impact on toy consumption, especially among lower-income families.

• Consumer Demand Destruction
  : Sustained 35-50% price increases could permanently reduce toy consumption patterns [3][4]
• Industry Consolidation
  : Smaller toy companies face closure risks, leading to market concentration among larger players [2][3]
• Employment Threats
  : Industry reports indicate thousands of potential job losses, particularly between April and July 2025 [5]
• Retaliatory Trade Escalation
  : China announced 34% retaliatory tariffs on all U.S. products, potentially expanding the trade conflict [3]

• Supply Chain Innovation
  : The crisis may accelerate automation and manufacturing innovation [2]
• Domestic Production Development
  : Long-term potential for rebuilding U.S. toy manufacturing capabilities
• Policy Advocacy Success
  : Industry lobbying efforts could result in tariff exemptions or modifications [5]

The immediate risk centers on the 2025 holiday season, with companies forced into “wait-and-see mode” [2]. However, the longer-term structural changes to global supply chains and consumer behavior patterns may create lasting industry transformation.

• U.S. lacks specialized labor force and supply chain infrastructure for mass toy production [2]
• 77% of U.S. toy imports originate from China, creating high vulnerability [3]
• Industry operates on thin margins, limiting cost absorption capacity [3]
• Decades of offshoring created deep integration with Asian manufacturing networks [2]

• Major toy stocks declined 25-26% following tariff announcements [2]
• Consumer costs projected to increase by $132 per shopper during 2025 holiday season [4]
• Price increases of 20-25% on individual products, with industry-wide projections of 35-50% [2][3]

• Tariff authority faces Supreme Court review, creating policy uncertainty [5]
• Industry associations actively lobbying for toy tariff exemptions [5]
• Retaliatory measures from China escalating trade tensions [3]

The analysis reveals that while tariffs may be intended as trade policy tools, their implementation creates complex economic consequences that disproportionately affect American consumers and businesses, particularly in labor-intensive industries like toy manufacturing.