Tariffs threaten to double toy prices in the US

In the United States, toy billionaire Nick Mowbray has stated that the recently imposed tariffs by former President Donald Trump have significantly hampered his toy company, Zuru. Mowbray indicated that the 145 percent tariffs on imports from China could necessitate considerable increases in retail prices for toys, potentially doubling them from current prices. He expressed concern that this situation might adversely affect families and children across the US during the holiday season. Zuru, which competes with industry giants like Mattel and Hasbro, is primarily reliant on manufacturing toys in China, where the company has established a robust supply chain over the past two decades. Mowbray noted how challenging it would be to relocate manufacturing operations to countries such as Vietnam or India due to the lack of a similar supply network. The tariff situation has prompted many of Zuru's US retailers to halt their orders, leading to a critical review of retail pricing strategies. Additionally, the company estimates that it will export NZ$2.2 billion worth of products to the US by 2025, which constitutes roughly half of its global sales. Mowbray warned that such high tariffs could lead to approximately NZ$3 billion in additional costs, thereby threatening the financial viability of his business model. The company has engaged in daily discussions to navigate this turbulent period, actively monitoring any potential exemptions that may arise for specific sectors. The long-standing growth that Zuru has enjoyed, having been built without external borrowing apart from an initial loan from family, is now at risk. Plans for an initial public offering to further fund expansion are currently on hold due to the uncertainty caused by tariff-related pressures. Mr. Mowbray has recognized the precariousness of their situation, emphasizing that the future of their established business can be jeopardized swiftly due to external factors beyond their control.