The ongoing debate over tariffs has been a hot topic this year, with proponents arguing that they are the best way to reinvigorate US manufacturing activity, while opponents say they are a costly tax that will push inflation higher and crimp profits, leading to job losses. The reality may be somewhere in the middle, but for increasingly more workers, the tariff fallout is already taking a toll. One of the largest U.S. toy companies, Hasbro, has announced it will lay off 150 workers as part of a cost-cutting move designed to offset some of the bite associated with increased import costs. This decision continues an alarming trend of layoffs, with over 696,000 people laid off through May this year, an 80% increase from last year. Hasbro's move is the latest in a series of efforts to keep its business in the black amid a host of challenges associated with tariffs impacting its bottom line. The company has been hit particularly hard by the tariffs placed on China, which have dealt a significant blow to the toy industry in 2025. In February, a 10% tariff was imposed on Chinese imports, which increased to 20% in March. In April, an additional 34% tariff was levied on China, kickstarting a trade war that, at its peak, lifted US-China tariffs to 145% and China tariffs on US goods to 125%. In May, the tit-for-tat tariff tussle de-escalated to allow for trade negotiations, but 30% tariffs remain on China. According to S&P Global, Mattel and Hasbro source 50% and 40% of their toys from mainland China, despite moves in recent years to shift production elsewhere. The tariffs will likely push costs higher on many items, given that the US has increasingly turned to low-cost China as a source of goods since China’s admission into the World Trade Organization in 2001. Hasbro CEO Chris Cocks discussed the impact of tariffs during their recent first-quarter earnings conference calls with shareholders. “Ultimately, tariffs translate into higher consumer prices, potential job losses as we adjust to absorb increased costs and reduced profits for our shareholders,” he said in April. S&P Global doesn’t expect the toy industry to grow this year, so demand isn’t likely to insulate Hasbro from the hit to its profit margin delivered by tariffs. Most companies have said that mitigating higher import taxes will require three major moves: supplier concessions, higher customer prices, and lower profitability. Hasbro plans to shave $1 billion in costs over the next few years, including via job cuts. Since 2023, Hasbro has reduced its headcount by 1,900 workers. The latest round of cuts involves 150 workers, or roughly 3% of Hasbro’s employees. However, the job losses aren’t likely to fully absorb the tariffs hit. Despite these efforts, targeted pricing actions remain likely. “Even with Hasbro's relative strength and flexibility, logistics are becoming more complex,” said CEO Chris Cocks on Hasbro's conference call. “Ultimately, tariffs translate into higher consumer prices, potential job losses as we adjust to absorb increased costs and reduced profits for our shareholders.”
