Business
How Trump’s Tariffs on China Are Affecting Toy Companies
At the biggest toy industry trade show in the Western Hemisphere this weekend, toy makers, as usual, displayed seemingly endless rows of stuffed animals, action figures and puzzles, hoping to entice retailers to pick their products.
But this year, the chatter at Toy Fair New York was dominated not by the next Barbie, but a larger game, one of global tactics, that could make most toys more expensive for U.S. consumers.
Almost 80 percent of toys sold in the United States are made in China. Last week, just as toy vendors from across the United States and dozens of other countries started to flock to the Jacob K. Javits Convention Center for the annual toy fair, President Trump announced a 10 percent tariff on Chinese goods that would come on top of the 10 percent he already imposed a month ago.
Companies big and small — from family-owned brands to household names — are trying to figure out how to manage the new costs related to tariffs. Stationed at a booth lined with plush stuffed animals, Linda Colson, the vice president of sales at Mary Meyer Corporation, said her company, based in Vermont, was in a state of paralysis over pricing. “We don’t know what to do,” she said. “I think a lot of people in this building are just waiting to see what everybody else is doing.”
Jay Foreman, the chief executive of Basic Fun, a toy manufacturer and distributor in Florida, sells to retailers including Walmart and Target. After Mr. Trump ordered the 10 percent tariff on China in February, Mr. Foreman started thinking of ways to avoid passing those costs onto his customers. So last Wednesday, he met with his company’s board of directors to devise a plan that would split the burden: the company, its factories in China and its retail customers would each absorb 3.5 percent of the added cost.
But just hours later, Mr. Foreman tuned into CNBC and heard Mr. Trump declare that new tariffs on China could jump to a total of 20 percent this week. The company’s plans “went right out the window,” said Mr. Foreman, whose company employs about 110 people in the United States and a total of 165 people globally.
“Now, those can’t be absorbed, and that additional tariff has to be passed onto the consumer,” he added. “It tipped the domino.”
The Tonka Mighty Dump Truck, which Basic Fun makes under a license from Hasbro, currently retails for $29.99. That price will probably increase between $5 and $10 for consumers, Mr. Foreman said.
Some of the bigger companies at the convention expressed confidence that their Chinese suppliers would absorb a portion of the added costs, as factories would not want to lose business.
Safari, which sells animal figurines, produces about 90 percent of its products in China, said Danny Falero, the company’s director of marketing, and manufacturers have said they are willing to make some concessions. He emphasized that his company did not intend to raise prices unless Mr. Trump’s policies went into effect.
“It’s slightly theater, so let’s see what actually lands, and then we’ll make adjustments based on that,” Mr. Falero said.
Looming tariffs were weighing heavily on Luis Prior, who owns Meavia Toys, a small company in Corbin, Ky. His three-year-old business designs sensory toys for children with special needs and are sold to teachers, hospitals and museums.
Mr. Prior said that regardless of whether tariffs on China stayed at 10 percent or doubled on Tuesday, he would have to raise his prices. But the uncertainty has made it impossible to make any specific pricing decisions, he said. When he returns home from the convention this week, Mr. Prior plans to go through his products, item by item, and reassess.
“Exhaustion,” Mr. Prior said. “That’s the only way I can describe it.”
Three billion toys are sold in the United States each year, generating $42 billion in sales and supporting nearly 700,000 jobs, according to the Toy Association, a trade group representing the U.S. toy industry.
The association has been lobbying for an exemption from Mr. Trump’s broad tariffs, pointing in part to the fact that small businesses make up roughly 96 percent of the industry, said Greg Ahearn, the group’s chief executive. During Mr. Trump’s first term in the White House, he had imposed 10 to 25 percent tariffs on many Chinese products — but he backed down from tariffs on toys, among other consumer goods.
While most toys are made in China, some manufacturing has moved to Mexico in recent years, but Mr. Trump also said that the 25 percent tariff he had imposed on Mexico and Canada would go into effect on Tuesday.
The Toy Association has been visiting senators’ offices and pushing to get its message to people inside the Trump administration, Mr. Ahearn said, as well as communicating with its members daily to share the latest updates on tariffs.
Mr. Trump’s announcement of an additional tariff on China coincided with Mr. Ahearn’s preparations for the Toy Fair. “It wasn’t good, and now it’s unbearable for us as an industry,” Mr. Ahearn said, adding that a 20 percent tariff will inevitably be passed onto consumers.
In an interview with CNBC on Monday, the White House trade adviser, Peter Navarro, doubled down on Mr. Trump’s tariff plans, saying their effect on consumer prices would be “second order small” when taking in account the administration’s simultaneous plans to deregulate industry, reduce the size of the federal government and expand energy production.
“I don’t see the president wavering on any of this,” he said.
Five years ago, Sharon Azula and her husband started a company called the Tooth Brigade selling tooth-fairy pillows. Last summer, they lowered the retail price for a pillow — a small stuffed animal with a tooth pouch — to $14, down from $16, which helped boost demand.
Tariffs, especially if they amount to 20 percent, are likely to force Ms. Azula to raise prices again, since everything they sell is manufactured in China. When they started the brand, she and her husband wanted to manufacture their products in the United States, but it was too expensive, she said.
Now, motioning to a pillow at her Toy Fair booth, Ms. Azula said she was worried that higher prices could sink the business.
“When I’m here, I try not to think about it,” she said, tearing up. “But when you try to think about what the future is going to be — I don’t know. I just don’t know.”
In a case that has become a local flashpoint, environmental groups seeking to halt a lithium operation in Imperial County until it gets further review argued before a state appeals court in San Diego on Thursday.
Controlled Thermal Resources wants to extract lithium from hot brine that will be used to power a geothermal electricity plant it plans to build. This type of lithium removal is different from traditional hardrock mining or evaporation ponds. The project also would need 6,500 acre-feet of fresh water annually for washing the mineral and cooling.
Earthworks, a nonprofit focused on the impacts of mining, and Comité Cívico del Valle, an Imperial County environmental justice group, allege the county didn’t adequately examine the project’s effects on water supply, air quality and tribal cultural resources when it granted approvals.
The groups filed suit in March 2024 and Imperial County Superior Court Judge Jeffrey Jones ruled against them in January 2025, saying the county met its legal requirements.
Before a panel of three judges for the California Court of Appeals 4th Appellate District, plaintiffs’ lawyer Doug Carstens argued that if water becomes scarcer, the project may rely on agricultural runoff that currently feeds the shrinking Salton Sea, exacerbating dust and air quality issues. He also said the environmental review did not account for future water-thirsty projects in the desert area.
“There will be a lot of straws dipping into the pool,” Carstens said.
The project, called Hell’s Kitchen, also failed to adequately involve local tribes in assessing the effect on cultural resources, he said.
Controlled Thermal Resources attorney Suzanne Varco said that the company reached out to 26 area tribes in 2021 and received no reply. She noted that one elder from Kwaaymii Laguna Band of Indians responded with concerns about mud pots and other resources in the area, but it was more than five months after the consultation period closed.
Justice Julia Kelety’s questions suggested the tribes provided names for resources in the area but failed to say how they would be affected.
Justice Truc Do said it was hard to assess fully how the project will affect the region’s water because the environmental review was unclear whether it will last 30 or 50 years. The region primarily relies on water from the overtapped and shrinking Colorado River.
The case is important because Imperial County has pegged its future to lithium, a mineral critical for electric car batteries. Two other companies are trying to reach commercial extraction near the Salton Sea. Gov. Gavin Newsom called Imperial Valley “the Saudi Arabia of lithium” in 2022, and has touted the industry’s potential to bring jobs and community benefits to one of the poorest counties in the state.
Multiple setbacks and deadline extensions later, lithium has yet to materialize even as industry job training programs graduate students into careers that have not arrived in the area. The county has blamed the lawsuit for the slow start. The boom and bust nature of mining as well as shifting federal policies have also played a role.
The court could decide within a few weeks to several months.
Earthworks and Comité Cívico del Valle have repeatedly said they don’t outright oppose lithium development in the area, but want CTR to acknowledge and minimize potential harm.
“We are not trying to stop the Hell’s Kitchen Project, we think it should be fixed, with enforceable protections for the environment, tribal cultural resources, and the health of frontline communities,” said Jared Naimark, senior manager at Earthworks.
Imperial County and CTR declined to comment on pending litigation, but Controlled Thermal Resources spokesperson Lauren Rose articulated a commitment to advancing geothermal and lithium development “as core components of our Hell’s Kitchen Project.” The company recently announced a plan to power local data centers which led some to worry about the company’s commitment to lithium.
Earlier this year the company delayed its plans for lithium production to 2028. Rose said the project is still progressing toward initial construction and will announce timing “as key development, financing, and construction milestones are achieved.”
Netflix on Thursday reported higher revenues and profit in the second quarter as it sought to assure investors about its growth prospects.
The streaming giant reported revenue of $12.6 billion in the second quarter, up 13% from a year ago. Net income during the period rose 9% to $3.4 billion.
Netflix said it expects revenue to grow 12% in the third quarter, but lowered its 2026 revenue forecast to $51 billion from $51.4 billion.
The results were roughly in line with what analysts had predicted and were driven by recent price increase and growth in advertising revenue. The latter is expected to reach $3 billion this year, the company said.
In a presentation with analysts, Netflix executives touted global expansion plans.
“We’re entertaining an audience approaching a billion people with still lots of room to grow into our addressable market on every measure,” said Spencer Neumann, Netflix’s chief financial officer, in the earnings presentation. “We believe we’ve got lots and lots of runway for solid growth ahead of us.”
Those comments appeared intended to assuage investors who’ve grown concerned that people could be spending less time on the streaming service as rivals like YouTube gain market share.
Netflix’s share of TV viewing time in the U.S. has steadily declined in recent months as rivals have gained market share, according to Nielsen data.
The streamer represented 7.8% of all TV viewing in the U.S. in April — the lowest percentage since May 2025. It was 7.5% in April 2025, Nielsen said.
By comparison, YouTube has seen its share of the streaming audience grow. YouTube’s TV viewing share in April rose to 13.4%, up from 12.4% a year earlier, Nielsen said.
Some investors fear that if viewership is down, subscribers could cancel the service, which would negatively affect the platform’s growing advertising business. It could also undercut Netflix’s ability to raise prices in the U.S. and other countries.
Those worries have caused Netflix’s stock price to plummet 41% in the last year. The stock closed on Thursday at $74.35 a share, up 1%. In after hours trading, the stock fell 8%.
“The engagement elephant continues to rear its head and investors are on edge that an earlier price hike in a seasonally tough period and lighter content slate could have driven more churn than usual,” wrote Morgan Stanley Research analysts in a research note.
On Thursday, Netflix said in a letter to shareholders it has a sophisticated understanding of its consumers and “we know not all hours are equal” and that engagement on its platform is “healthy.”
“The entertainment industry remains dynamic and competitive,” Netflix told shareholders. “We aim to stay ahead by executing against our three areas of focus: delivering more entertainment value, leveraging technology to improve every aspect of our service, and improving monetization.”
The Los Gatos-based company said it plans to allocate more than 5% of its content spend on live programming this year. Live content has been a key driver for subscriptions, accounting for six of the top 10 new member sign-up days over the last five years, the company said.
In the first half of 2026, Netflix said members watched more than 97 billion hours, up 2% from a year ago. Among the most popular shows: the crime thriller “I Will Find You,” which had 87 million views; and the romantic comedy film “Voicemails for Isabelle,” which garnered 71 million views.
Netflix has been adding new types of content to its platform, including video podcasts to help increase engagement with subscribers during the day.
As part of the diversification efforts, the platform has expanded its portfolio of live programming over the years, including adding NFL games and streaming Major League Baseball’s opening day game.
In 2022, Netflix had also faced investor pressure when it reported declining subscribers for the first time in more than a decade. That pushed the company to delve into other areas including advertising, gaming and cracking down on password sharing.
SpaceX stock dropped below its initial public offering price for the first time on Wednesday, signaling dwindling hype around the Elon Musk company.
Shares dipped below their IPO price of $135 on Wednesday morning for the first time since listing, a humbling loss for the stock, which had skyrocketed more than 50% in its first days of trading last month.
The shares regained some ground later in the day, closing at $135.27.
The initial offering gave the company a market cap of $2.2 trillion, making it one of the world’s most valuable public companies. For a short period, the IPO also made owner Elon Musk the world’s first trillionaire, though his net worth now is about $800 billion.
On July 7, the company was added to the Nasdaq-100 after a rule change allowed companies to join 15 days after their IPOs.
SpaceX raised a total of $86 billion after underwriters exercised their right to sell additional shares, on top of the $75 billion initially raised. It was the largest IPO in history.
SpaceX, based near Austin, Texas, is the leading launch services company in the world, with its Falcon 9 rocket accounting for the vast majority of satellites launched last year.
It is also the leading satellite-based broadband provider with its Starlink service. The extraordinary interest in the IPO was driven by Musk’s plans to make the company an AI leader — including plans to launch orbiting satellite data centers powered by the sun that crunch AI data.
The company’s headquarters moved from Hawthorne to Texas in 2024, but it retains large operations in the South Bay city and blasts off regularly from Vandenberg Space Force Base in Santa Barbara County.
Since the IPO, SpaceX has used its newfound wealth to expand in the AI space.
It announced last month that it was acquiring the AI coding startup Cursor for $60 billion, with the deal expected to close in the third quarter. The San Francisco company, founded in 2022, enables engineers to instruct software in English to run coding tasks autonomously.
Musk also merged his xAI artificial intelligence company into SpaceX earlier this year. The combined entity recently announced it was leasing computing power to rivals Anthropic and Google at two terrestrial data centers it has constructed.
Since the IPO, investors have expressed concerns about the company’s spending plans and debt load.
Even with the volatility of the last month, there’s still more uncertainty to come.
The stock could fall further as locked-up shares held by current and former employees are released.
At least 20% of the shares will be released after second-quarter results are disclosed sometime in the coming months, with all the lockups expiring in December.
But Space X isn’t the only megacap stock to experience ups and downs early on.
Shares of Meta, then named Facebook, fell significantly below the IPO price of $38 before recovering. After its May 2012 launch, shares plummeted by nearly 50% and hit a record low of $19.69 in August 2012.
The company took more than 14 months to rebound, finally surpassing its $38 IPO price in July 2013.
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