The U.S. toy industry highlighted China’s leadership as a supplier and identified Mexico as a “key partner.”

According to the Toy Industry Association, approximately 76% of all toys sold in the United States come from China.

The Association noted that Chinese toy suppliers are qualified and capable of meeting strict U.S. product safety standards for use by American children.

U.S. Toy Industry

The Toy Industry Association cited the cases of China and Mexico as part of its comments on the Section 301 investigations. These investigations concern the actions, policies, and practices of certain economies regarding structural overcapacity. Additionally, they cover production in the manufacturing sectors.

“The toy industry has taken significant steps to diversify its supply chain, with Mexico emerging as a key partner under the United States-Mexico-Canada Agreement (USMCA). Furthermore, the predictable, consistent, and open trade conditions it provides have also been significant. 

The USMCA has enabled efficient and highly integrated operations between the United States and Mexico for the design, sourcing, testing, and distribution of safe, high-quality toys. Furthermore, it has strengthened competitiveness, efficiency, and resilience within a rules-based framework. At the same time, it helps reduce dependence on China. 

Beyond Mexico, the industry has also expanded its production capacity in Vietnam, India, Indonesia, Thailand, and Malaysia. This contributes to diversification and risk reduction, without structural concerns about overcapacity in these markets.

Market 

The Toy Association reported that the overall U.S. toy market reached approximately $41 billion in 2023. Of this total, $28 billion corresponds to U.S. toy retail sales, according to statistics from Circana’s Retail Tracking Service. 

In addition, the Toy Association noted that outdoor and sports toys account for approximately $4.5 billion of total U.S. toy retail sales. Therefore, they remain the most significant category in the market.

Offshoring

Toys are low-cost consumer goods, so offshoring production plays a key role in maintaining high quality while keeping prices affordable for American households. 

For this reason, for more than 40 years, the U.S. toy industry has worked to develop its supply chain, primarily in China. This has included world-class infrastructure with the expertise and capacity to produce excellent, safe, durable, and compliant toys. This has ensured that they remain accessible to American children. 

Diversification of the Supply Chain

The development of comparable manufacturing capabilities in the United States and in economies such as Mexico, Vietnam, India, Indonesia, Thailand, and Malaysia has required significant additional investments and maturation processes spanning several years for the toy industry. In contrast, China remains a strategic pillar of manufacturing, supported by its accumulated expertise and a highly integrated local supply chain.

Furthermore, the reconfiguration of the sector’s supply chains requires, as an enabling condition, the identification and training of a skilled workforce capable of meeting strict safety and quality standards.