🎁🚗 Tariffs Take a Toll: Big Hits for Toymakers and Automakers Alike

Major toy and auto manufacturers are feeling the heat as tariffs take a heavy toll on their bottom lines. From Hasbro to GM, the cost of doing business is rising fast, and both industries are making strategic moves to absorb or offset the financial damage. Here's a breakdown of how tariffs are shaking up toys, trucks, and everything in between.

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Hasbro Feels the Pinch with a $1 Billion Hit

Toy giant Hasbro revealed during its quarterly earnings call that it took a massive $1 billion hit in the second quarter alone due to tariff-related costs in its consumer products division. While the company is optimistic about overall growth in 2025 — particularly in the games category — it expects consumer product revenues to fall by 5% to 8% this year.

Tariffs are projected to cost Hasbro $60 million in 2025. In response, the company is working to reduce the share of U.S. toys and games sourced from China — currently at 50% — to below 40% by 2027. Additionally, Hasbro plans to increase production within the United States, aligning with former President Donald Trump’s push for domestic manufacturing.

Mattel Faces Up to $100 Million in Tariff Costs

Rival toymaker Mattel is also bracing for a substantial tariff hit — up to $100 million this year. The company has responded by adjusting product pricing, though it hasn’t shared specifics about which products were affected or when the price hikes took effect.

“This is the price necessary to offset some of the headwinds,” said CFO Paul Ruh, citing other internal efforts underway to combat rising costs. Mattel is accelerating its supply chain diversification and improving sourcing methods — and it says no more price hikes are expected this year.

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Auto Industry Hit Even Harder: GM Leads with $5 Billion in Tariff Exposure

The auto industry is not immune. General Motors reported a staggering $1.1 billion in tariff-related costs for Q2 and anticipates full-year losses from tariffs could range from $4 billion to $5 billion.

So far, GM has absorbed these costs, relying on cost-cutting measures and U.S. investments to soften the blow. “Our $4 billion of capital initiatives to bring production back to the U.S. will pay off in the next 18 to 24 months,” said CFO Paul Jacobson.

Stellantis and Volvo Adjust Production Plans

Stellantis — the maker of Jeep, Chrysler, and Dodge — reported a $2.7 billion loss in the first half of the year, partly due to tariffs. Volvo also saw its Q2 operating profit drop significantly and now plans to start producing its best-selling XC60 SUV in South Carolina starting next year.

Currently, the U.S. imposes 25% tariffs on imported vehicles and parts, and 50% on steel and aluminum. These tariffs are part of a shifting policy landscape as the Trump administration renegotiates trade deals globally.

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Japan Deal Raises Industry Concerns

A new agreement with Japan sets import tariffs at 15%, lower than the 25% rate threatened by the administration. But this has sparked backlash from the American Automotive Policy Council, which represents GM, Ford, and Stellantis.

“Tariffs should not be lower on Japanese cars with little to no U.S. content than on North American-built vehicles with high U.S. content,” said Matt Blunt, AAPC president.

Commerce Secretary Howard Lutnick dismissed these concerns, stating, “The American manufacturers will thrive — as long as they build in America.”

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Will Prices Go Up for Consumers?

So far, car companies haven’t significantly increased consumer prices — but that might change.

“The big question for the rest of the year is whether they’ll keep absorbing the costs or begin passing them on to consumers,” said Erin Keating, executive analyst at Cox Automotive.

Cox predicts car prices could increase by 4% to 8% by year’s end, with both new and used inventory already declining in July.

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Holiday Toy Shortage on the Horizon?

Hasbro also warned of a potential toy shortage this holiday season. Due to slowed imports, some popular items might not be restocked in time.

“A lot of hot products may be out of stock this holiday,” said Hasbro CEO Chris Cocks. “If you're looking for Play-Doh Barbie, Nano-Mals, or Baby Evie — shop early.”

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Conclusion:

With tariffs biting deep into profits, both the toy and auto industries are taking drastic steps to manage costs, shift supply chains, and rethink where and how they make their products. The real impact may still be unfolding — and it could land squarely on consumers just in time for the holidays.

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