U.S. Tariff Impact on Global Toy Industry - Maxthon

Trump’s Trade War and Its Ripple Effects on American Retailers, Global Supply Chains, and Singapore

Executive Summary

In 2025, the Trump administration’s aggressive tariff regime fundamentally disrupted the global toy industry, with rates on Chinese imports surging from 10% in March to a peak of 145% in April before settling at 47% by October. This case study examines the economic impact on American retailers, particularly the widening divide between independent stores and big-box chains, the restructuring of global supply chains, and the implications for Singapore as a trade hub and regional manufacturing alternative.

The tariffs, intended to revitalize American manufacturing and pressure China, instead accelerated small business closures, eliminated 42,000 manufacturing jobs, and fundamentally altered consumer behavior. For Singapore, the situation presents both opportunities and challenges as global manufacturers seek alternatives to Chinese production and navigate increasingly fragmented trade relationships.

Background: The Escalation

Timeline of Events

January 2025: Initial 10% tariff on Chinese imports announced

March 2025: Tariffs formally implemented during Toy Fair, causing immediate industry concern

April 2025: “Liberation Day” – tariffs surge to 145% (125% base + 20% “fentanyl tariff”)

China retaliates with soya bean purchase freezes and rare-earth export restrictions
Small retailers begin receiving daily price increase notifications from vendors
U.S. imports begin declining

June-July 2025: Wave of independent toy store closures, including West Side Kids after 44 years

August 2025: U.S. imports drop 5% to $340 billion; 30+ countries suspend parcel deliveries to U.S.

October 2025: Trump-Xi meeting in Busan, South Korea

Tariffs reduced to 47%
China suspends rare-earth restrictions for one year
Both sides claim victory but fundamental tensions remain

November 2025: Consumer confidence hits near-record lows; Trump approval rating drops to 38%

Industry Context

The toy industry represents a critical test case for understanding modern trade disruptions:

Market Size: Americans purchase 3 billion toys annually
Employment: 700,000 people work in the U.S. toy industry
Business Composition: 96% small businesses, but big-box retailers control 50%+ market share
China Dependence: China produces nearly 80% of global toy supply
Seasonal Concentration: Holiday season accounts for 25% of annual sales

Case Analysis: Three Perspectives

1. The Independent Retailer: West Side Kids

Profile: Family-owned Manhattan toy store, established 1981, run by Jennifer Bergman (second generation)

Impact Timeline:

March 2025: Assured by suppliers that existing stock would carry them through the year
April 2025: Suppliers break promises; daily price increase emails begin arriving
Nightly repricing: Bergman manually changes price tags with a pricing gun after closing
Two potential buyers withdraw after tariff increase
June 2025: Unable to pay July rent, skips own salary to pay staff
July 31, 2025: Permanent closure after 44 years

Financial Reality:

Example toy originally $21.99 would need to retail at $35+ to maintain margins
Cannot compete with Amazon’s lower prices
Lacks capital to stockpile inventory like big-box competitors
No product diversification to absorb losses in one category

Quote: “The tariffs are paid by vendors when the products arrive in the United States. The tariffs are not paid by China. The vendor passes the tariffs on to us, and we have to share it with you.”

2. The Mid-Sized Retailer: Child’s Play (Washington DC)

Challenge: The Phantom Rubik’s Cube pricing dilemma

January 2025:

Wholesale cost: $11.29
Retail price: $24.99
Healthy margin maintained

October 2025:

Wholesale cost: $14.99 (+33%)
Should retail at: $29.99 to maintain margins
Target’s price: $9.99
Actual price: $24.99 (absorbing loss to stay competitive)

Strategic Dilemma: Child’s Play purchaser Erica Card faces an impossible choice: raise prices and lose customers to big-box retailers, or maintain competitive pricing and eliminate profit margins. The store chose survival over profitability, accepting diminished returns rather than exit the market entirely.

Result: Store remains open but profitability severely compromised; questions viability of carrying certain product lines.

3. The Manufacturer: Basic Fun

Profile: Makes classic American toys (Tonka Trucks, Lincoln Logs, Care Bears), CEO Jay Foreman has worked with China since 1989

Strategic Decision: “Plant the flag” – committed to China despite tariffs

Impact:

Stopped shipping toys when tariffs hit 145%
Implemented hiring freeze
Record sales year transformed into difficult year
Expected profits cut by 20%

Analysis of U.S. Manufacturing Viability:

Foreman identifies fundamental barriers to reshoring toy production:

Labor Supply: Immigration crackdown reduced available workforce for low-skill manufacturing
Infrastructure: Government support for building factories never materialized
Complexity: “If we can’t make iPhones, we can’t make a teddy bear”
Capital Investment: Years of planning and major investment required with no guarantee tariffs will persist
Historical Precedent: 2017 Foxconn $10B manufacturing project with promised 13,000 jobs mostly scrapped by 2021

Quote: “You’re not going to set up light, industrial, low-skill factories here and try to move people from high school into toy factories selling teddy bears or painting eyeballs on Barbie dolls.”

The Structural Divide: Why Big-Box Retailers Survived

Advantages of Scale

Walmart and Target’s Competitive Edge:

Inventory Management:
- Can stockpile months of inventory before tariff implementation
- Massive distribution center networks
- Sophisticated logistics systems
Purchasing Power:
- Negotiate directly with manufacturers
- Order in volumes that secure better wholesale pricing
- Can commit to long-term contracts that smaller retailers cannot
Product Diversification:
- Toy purchaser might also buy groceries, household goods, clothing
- Can raise prices in one category while subsidizing another
- Spread tariff costs across broader basket of goods
Financial Buffers:
- Deep capital reserves to absorb temporary losses
- Access to credit markets
- Can operate segments at loss while maintaining overall profitability
Lobbying Power:
- Direct access to policymakers
- Resources to advocate for exemptions or relief
- Political leverage small businesses lack

The Independent Retailer Disadvantage

Structural Constraints:

Capital Limitations: Cannot afford to stockpile inventory or absorb losses
Product Concentration: Toy-only stores cannot subsidize losses with other categories
Margin Sensitivity: Single pricing decision can determine survival
No Political Voice: Individual store owners have no meaningful access to policymakers
Limited Negotiating Power: Take supplier prices as given

Result: Competitive landscape that existed before tariffs—already tilted toward big-box retailers—became completely unsurvivable for small operators.

Economic Impact: By the Numbers

Retailer Impact

Small Business Threat: Nearly 50% of small and mid-sized toy makers reported tariffs severe enough to threaten survival
Store Closures: Unknown total number, but West Side Kids represents typical trajectory
Market Concentration: Big-box chains’ 50%+ market share likely increased as independent stores closed
Price Disparity: Independent stores selling identical products at 2-3x big-box prices

Employment and Manufacturing

Manufacturing Job Losses: 42,000 jobs lost between April and August 2025
Retail Job Losses: Unmeasured but substantial as stores closed
Failed Reshoring: Zero evidence of toy manufacturing returning to U.S.
Hiring Freezes: Companies like Basic Fun stopped all new hiring

Trade Flows

Total Import Decline: 5% drop to $340 billion by August 2025
China’s Market Share: Declined from 75.9% (2024) to 67.3% (2025)
Alternative Sources: Vietnam (8.6% → 11.7%), Mexico (6.5% → 9.4%), Indonesia (2.6% → 3.3%)
Customs Revenue: $30 billion collected by September 2025, up from $5 billion in January

Consumer Impact

Price Increases: Toys at independent stores up 30-60%
Reduced Selection: Stores carrying fewer product lines
Shopping Behavior: Accelerated shift to big-box retailers and online
Consumer Confidence: Near-record lows by November 2025

Outlook: Short, Medium, and Long-Term Projections

Short-Term (6-12 Months)

Likely Developments:

Continued Small Retailer Closures: Many stores operating on borrowed time; 2025 holiday season results will determine 2026 viability
Supply Chain Stabilization: With tariffs at 47% vs. 145%, manufacturers can plan more effectively, though uncertainty remains
Legal Resolution: Supreme Court ruling expected December 2025 on constitutionality of presidential tariff authority; could dramatically alter landscape
Political Pressure: Low approval ratings (38%) may force policy recalibration, especially approaching 2026 midterms
Inventory Corrections: Retailers that overstocked pre-tariff will work through excess inventory; those who understocked will face continued shortages

Risks:

Tariff re-escalation if U.S.-China tensions flare
Additional countries targeted for tariffs
Retaliatory measures from China or other nations
Economic recession triggered by trade disruptions and low consumer confidence

Medium-Term (1-3 Years)

Structural Changes:

Permanent Market Consolidation:
- Independent toy stores will represent decreasing market share
- Survivors will be niche, high-end, or experience-focused retailers
- Big-box dominance becomes more entrenched
Supply Chain Diversification:
- Continued gradual shift from China to Southeast Asia, Mexico, India
- No single country will replace China’s scale
- Costs will remain higher due to inefficiency of fragmented production
Manufacturing Reality:
- Toy production will NOT meaningfully return to U.S.
- Labor costs, infrastructure gaps, and skills shortages make it unviable
- Any reshoring will be limited to high-value, specialized products
Price Stabilization at Higher Level:
- Consumers will adjust to permanently higher toy prices
- Demand destruction in mid-market segment
- Growth in ultra-budget and ultra-premium segments
E-commerce Acceleration:
- Physical retail footprint continues shrinking
- Amazon and online marketplaces gain further share
- Experiential retail (play spaces, events) becomes differentiation strategy for survivors

Opportunities:

Specialty retailers focusing on educational, sustainable, or artisanal toys
Direct-to-consumer brands bypassing traditional retail
Rental and subscription models for expensive toys
Regional manufacturing hubs in Latin America for U.S. market

Long-Term (3-10 Years)

Transformational Scenarios:

Scenario 1: Managed Trade Normalization (40% probability)

Gradual tariff reduction as political winds shift
U.S.-China relationship stabilizes at “managed competition” level
Global supply chains partially reconverge around China
Independent retail stabilizes at lower baseline
Industry structure: Big-box (60%), Online (30%), Independent (10%)

Scenario 2: Persistent Fragmentation (35% probability)

Tariffs remain elevated but stable (30-50% range)
“China +1” strategy becomes permanent (Vietnam, India, Mexico as secondary hubs)
Higher structural costs accepted as “cost of resilience”
Independent retail nearly extinct except in premium urban markets
Industry structure: Big-box (50%), Online (40%), Independent (5%), Direct-to-Consumer (5%)

Scenario 3: Escalated Decoupling (20% probability)

U.S.-China economic relationship deteriorates further
Comprehensive restrictions on Chinese imports
Severe consumer price increases
Toy industry shrinks significantly; becomes luxury category
Mass market shifts to digital entertainment/gaming
Industry structure: Online (60%), Big-box (30%), Premium retailers (10%)

Scenario 4: Policy Reversal (5% probability)

Supreme Court rules tariffs unconstitutional or new administration reverses policy
Rapid return to pre-2025 trade patterns
Some independent retailers re-emerge but many lost permanently
Chinese manufacturing dominance restored
Industry structure: Similar to 2023 baseline with moderate big-box gains retained

Solutions and Recommendations

For Independent Retailers (Immediate Survival)

1. Strategic Product Curation

Focus on products with highest margins and lowest tariff exposure
Eliminate low-margin items where big-box price competition is insurmountable
Emphasize non-Chinese sourced products (European, American, artisanal)

2. Value-Added Services

Personal shopping and gift consultation
Birthday party hosting and event services
Toy rental or subscription programs
Educational workshops and play sessions
Gift wrapping and delivery services

3. Community Integration

Position as neighborhood anchor, not just retail
Partner with schools, daycares, parenting groups
Host author events, character appearances, seasonal activities
Build loyalty program rewarding repeat customers

4. Operational Efficiency

Renegotiate lease terms or relocate to lower-rent locations
Optimize inventory to reduce carrying costs
Implement just-in-time ordering where possible
Consider cooperative purchasing with other independent retailers

5. Digital Presence

Develop e-commerce capability (local delivery focus)
Active social media engagement
Online ordering with in-store pickup
Virtual shopping appointments

For Mid-Sized Retailers (Adaptation Strategies)

1. Vertical Integration

Direct relationships with manufacturers to cut out middlemen
Consider private label products with better margins
Explore exclusive distribution agreements

2. Geographic Diversification

Expand to multiple locations to gain scale advantages
Consider franchising model
Regional buying cooperatives with other mid-sized retailers

3. Experience Retail

Transform stores into destinations (play areas, cafes, demonstrations)
Host birthday parties and events
Create “retailtainment” that online cannot replicate

4. Financial Engineering

Negotiate extended payment terms with suppliers
Secure lines of credit before crisis deepens
Consider strategic partnerships or partial acquisition by larger players

For Manufacturers (Supply Chain Adaptation)

1. Geographic Diversification

Establish production capacity in multiple countries
“China +3” strategy: maintain China base while building alternatives
Focus on: Vietnam, Indonesia, India, Mexico, Thailand

2. Modular Production

Design products that can be partially manufactured in different locations
Final assembly in low-tariff jurisdictions
Component sourcing from tariff-exempt countries

3. Inventory Strategy

Build strategic reserves during low-tariff periods
Warehouse in bonded zones or third countries
Stagger production to smooth tariff impact

4. Product Innovation

Design with tariff minimization in mind
Explore materials and components from non-Chinese sources
Develop products viable for U.S. manufacturing (high-value, low-labor)

For Industry Advocacy Groups

1. Political Engagement

Unified lobbying for tariff relief or toy-specific exemptions
Document economic harm with data
Mobilize grassroots pressure from consumers and workers
Coalition building with other affected industries

2. Legal Challenges

Support constitutional challenges to presidential tariff authority
Pursue administrative challenges under trade law
Seek judicial review of specific tariff decisions

3. Public Education

Campaigns explaining tariff incidence (consumers/retailers pay, not China)
Highlight small business casualties
Counter narrative that tariffs protect American jobs

4. Alternative Solutions

Propose targeted measures that address legitimate concerns (IP theft, forced technology transfer) without broad tariffs
Advocate for investment in American competitiveness rather than protectionism

Extended Solutions: Systemic Reform

Policy-Level Interventions

1. Smart Tariff Design

If tariffs must exist, design them intelligently:

Graduated Implementation: Phase in over 2-3 years to allow supply chain adjustment
Product-Specific: Target specific products where U.S. has genuine manufacturing capacity
Small Business Exemptions: Exclude importers below certain volume thresholds
Temporary with Clear Endpoints: Businesses can plan if they know duration

2. Small Business Support Programs

Government assistance to offset tariff burden:

Tax Credits: Dollar-for-dollar credit for tariffs paid, phased out based on business size
Low-Interest Loans: Access to capital to stockpile inventory or invest in efficiency
Technical Assistance: Help navigating alternative supply chains
Rent Subsidies: Temporary support for commercial lease obligations

3. Manufacturing Investment

If goal is genuine reshoring:

Infrastructure Development: Government builds industrial parks with subsidized rent
Workforce Training: Community college programs for light manufacturing skills
Capital Subsidies: Direct grants for factory construction and equipment
Regulatory Streamlining: Fast-track permitting for manufacturing facilities
Immigration Reform: Visa programs for manufacturing workers

Reality Check: Even with these interventions, toy manufacturing unlikely to return to U.S. at scale due to fundamental economics.

4. Trade Agreement Modernization

Long-term solution is updated multilateral trade framework:

Rules-Based System: Predictable, transparent, enforceable
IP Protection: Strong enforcement mechanisms for technology theft
Labor Standards: Enforceable minimum standards to level playing field
Environmental Standards: Prevent race-to-bottom competition
Dispute Resolution: Efficient, neutral arbitration system

Industry-Level Innovations

1. Cooperative Business Models

Independent retailers band together:

Buying Consortiums: Pool purchasing power to negotiate better terms
Shared Warehousing: Reduce individual inventory costs
Collective Bargaining: Negotiate as group with landlords, suppliers
Joint Marketing: Shared advertising and promotional campaigns

2. Hybrid Retail Models

Blend physical and digital:

Showroom + E-commerce: Small footprint for experience, online for transactions
Pop-Up Networks: Seasonal stores in high-traffic areas
Mobile Retail: Trucks/vans bring curated selection to neighborhoods
Marketplace Integration: Independent retailers sell on Amazon/eBay but maintain brand

3. Subscription Services

Shift from transaction to relationship:

Toy Rental: Monthly subscription for age-appropriate toys, rotate regularly
Curated Boxes: Personalized selection based on child’s interests and development
Educational Packages: Bundled learning activities and toys
Sustainability Focus: Circular economy model (rent, return, refurbish)

4. Direct-to-Consumer Manufacturing

Bypass traditional retail entirely:

Crowdfunding: Finance new products directly from customers
Made-to-Order: Eliminate inventory costs, manufacture on demand
Community Design: Customers participate in product development
Radical Transparency: Share full cost breakdown including tariff impact

Consumer-Level Changes

1. Conscious Consumption

Educate consumers about choices:

True Cost Awareness: Understand who profits from different purchasing decisions
Local Business Support: Premium pricing justified by community benefit
Quality Over Quantity: Buy fewer, better toys that last
Secondhand Markets: Robust resale ecosystem for gently used toys

2. Experience Over Products

Cultural shift away from product accumulation:

Activity-Based Gifts: Experiences, classes, memberships instead of physical toys
Toy Libraries: Community resources for borrowing toys
Skill Development: Invest in lessons, coaching rather than equipment
Digital Entertainment: Shift to video games, apps, streaming content

Singapore Impact: Opportunities and Challenges

Current Position

Singapore occupies a unique position in global toy trade:

As Trade Hub:

Major transshipment point between Asia and rest of world
Sophisticated logistics infrastructure
Strong IP protection and rule of law
Stable political and economic environment

As Manufacturing Alternative:

Limited direct toy manufacturing (high labor costs)
Strong in specialized, high-value products (educational toys, robotics)
Advanced automation capabilities
Quality and innovation reputation

As Regional Headquarters:

Many global toy companies have Asia-Pacific operations based in Singapore
Strategic decision-making center
Financial and management hub

Immediate Impact (2025-2026)

1. Trade Flow Disruption

Transshipment Volume: Potential decline in toy cargo through Singapore ports as direct China-U.S. trade decreases
Re-routing: Some Chinese manufacturers may ship through Singapore to obscure origin (risky, likely to trigger U.S. scrutiny)
Documentation Demand: Increased need for country-of-origin certification services

2. Regional Hub Activity Increase

Supply Chain Management: Companies relocating procurement and logistics operations to Singapore to manage diversified Asian production
Financial Services: Increased trade finance and hedging activity as companies manage tariff risk
Legal Services: Demand for trade law expertise, dispute resolution, compliance advice

3. Manufacturing Relocation Inquiries

Assessment Phase: Some manufacturers exploring Singapore as alternative but deterred by costs
Technology Transfer: Interest in Singapore’s automation and robotics capabilities to offset labor costs
Niche Products: Feasible for very high-margin, specialized educational/STEM toys

Medium-Term Opportunities (1-3 Years)

1. Regional Manufacturing Coordination Hub

Strategy: Position Singapore as command center for distributed ASEAN manufacturing

Implementation:

Design and Development: High-value R&D activities in Singapore
Quality Control: Central testing and certification facility
Supply Chain Orchestration: Manage production across Vietnam, Indonesia, Malaysia, Thailand
Final Assembly and Packaging: Some high-margin activities in Singapore

Value Proposition:

Maintain quality while accessing lower-cost ASEAN labor
Leverage Singapore’s IP protection and business environment
Benefit from ASEAN trade agreements and Singapore’s FTA network

2. Innovation and Premium Segment

Focus Areas:

Educational Technology: Smart toys, coding robots, STEM learning tools
Sustainable Toys: Eco-friendly materials, circular economy models
Customization: Made-to-order, personalized products
Therapeutic/Special Needs: Specialized toys for development and therapy

Competitive Advantages:

Strong education system produces qualified designers and engineers
Government support for innovation (grants, tax incentives)
Proximity to wealthy Asian consumer markets
English-language business environment attracts global talent

3. Digital and Hybrid Products

Opportunity: Physical-digital toy integration

Examples:

Augmented reality toys
Connected toys (IoT-enabled)
Educational apps paired with physical manipulatives
Subscription services with digital content

Singapore Strengths:

World-class digital infrastructure
Strong software development capabilities
Sophisticated consumer electronics sector
Data privacy and cybersecurity expertise

Long-Term Strategic Positioning (3-10 Years)

1. ASEAN Manufacturing Network Anchor

Vision: Singapore as brain, ASEAN as hands

Model:

High-value activities: Design, engineering, marketing, finance (Singapore)
Labor-intensive production: Vietnam, Indonesia, Cambodia
Specialized components: Thailand, Malaysia
Final assembly and distribution: Based on target market

Requirements:

Strong infrastructure links (ports, airports, digital connectivity)
Harmonized regulations across ASEAN
Skilled workforce for high-value activities
Investment in partner country capacity

2. Asia-Pacific Consumer Market Focus

Strategic Shift: From export-oriented to Asia-serving production

Rationale:

Growing middle class across Asia
Rising demand for quality toys and education products
Reduced dependence on volatile U.S. market
Shorter supply chains for regional sales

Singapore Role:

Gateway to Southeast Asian consumers
Premium brand positioning for Singapore-designed products
Leverage Chinese tourist market (pre-pandemic model)
E-commerce fulfillment hub for region

3. Toy Industry Think Tank and Innovation Hub

Positioning: Singapore as global center of excellence for toy innovation

Components:

Research Institute: Academic partnerships studying child development, play, learning
Testing and Certification: World-class safety and quality standards
Sustainability Leadership: Circular economy models, eco-design
Industry Events: Attract Asian Toy Fair or similar major events
Startup Ecosystem: Incubators for toy tech companies

Challenges and Risks for Singapore

1. Cost Disadvantage

Labor costs 5-10x higher than Vietnam, Indonesia
Real estate among world’s most expensive
Cannot compete on price for mass-market products
Must focus exclusively on high-value segments

2. Scale Limitations

Small domestic market (5.6 million population)
Cannot achieve economies of scale of larger countries
Dependence on export markets introduces volatility
Limited land area constrains manufacturing footprint

3. Geopolitical Risks

U.S.-China Tensions: Singapore must navigate carefully to maintain relationships with both
ASEAN Cohesion: Regional cooperation essential; political tensions could undermine strategy
Tariff Targeting: If U.S. expands tariffs, could eventually target Singapore
Technology Competition: China-U.S. tech rivalry could force uncomfortable choices

4. Competition from Regional Rivals

Vietnam aggressively pursuing manufacturing investment
Thailand has established toy manufacturing base
Malaysia offers similar advantages at lower cost
Indonesia has demographic scale Singapore lacks

Recommended Strategies for Singapore

Government Level:

Trade Diplomacy: Active engagement with both U.S. and China to maintain market access; advocate for multilateral trade rules
FTA Expansion: Ensure Singapore-based production has preferential access to major markets
Industry Support: Targeted grants and tax incentives for toy innovation and premium manufacturing
Workforce Development: Training programs for toy design, engineering, quality control
Infrastructure Investment: Maintain world-class logistics to serve as ASEAN hub
ASEAN Coordination: Lead regional efforts to position Southeast Asia as alternative to China for manufacturing

Business Level:

Value Chain Analysis: Identify which toy production activities make sense for Singapore vs. regional partners
Strategic Partnerships: Form alliances with ASEAN manufacturers for coordinated production
Market Diversification: Reduce dependence on U.S. market; focus on Asia growth
Innovation Investment: R&D in smart toys, educational technology, sustainability
Brand Building: Develop “Designed in Singapore” as quality and innovation signal

Singapore’s Realistic Role

What Singapore Should NOT Try:

Mass-market toy manufacturing (uncompetitive on cost)
Competing directly with China on scale
Serving as simple transshipment point to evade tariffs (legal and reputational risk)

What Singapore CAN Excel At:

Regional headquarters for global toy companies
Design and innovation center
Quality control and testing hub
Supply chain coordination for distributed ASEAN production
Premium and specialized toy manufacturing
Digital/physical hybrid products
Educational toy leadership
Serving growing Asian consumer market

Realistic Outcome: Singapore captures small but highly profitable segment of global toy value chain, focused on brain-intensive rather than labor-intensive activities. Regional role as coordinator and service provider generates more economic value than direct manufacturing would.

Conclusion: A Transformed Industry

The 2025 tariff war accelerated trends already reshaping the toy industry but created permanent structural changes that will define the sector for years to come. The impact has been asymmetric, devastating small retailers while strengthening the dominant position of big-box chains and online marketplaces.

The case of West Side Kids—a 44-year-old family business forced to close—illustrates the human cost of trade policy. While tariffs were marketed as protecting American workers and businesses, the reality was precisely the opposite: American small business owners and workers bore the primary burden.

For Singapore, the disruption creates opportunities to strengthen its position as a regional hub and innovation center, but success requires strategic focus on high-value activities where Singapore’s strengths offset its cost disadvantages. The country’s future in the toy industry lies not in competing with Vietnam or China on manufacturing scale, but in orchestrating regional supply chains, driving innovation, and serving the growing Asian consumer market.

The broader lesson transcends toys: in an interconnected global economy, unilateral trade restrictions inevitably harm domestic businesses and consumers, accelerate structural changes favoring large incumbents over small challengers, and create ripple effects across regions and sectors. The path forward requires not nostalgic attempts to reverse globalization, but smart policies that help businesses adapt to evolving competitive realities while protecting the most vulnerable from disruption’s harshest impacts.