Made-in-China toy billionaire says tariffs will double US prices

Wellington – Toy billionaire Nick Mowbray said US President Donald Trump’s tariffs have “paralysed” his company and left it with little choice but to pump up retail prices in the US.

Mr Mowbray’s Zuru Group manufactures toys like Pets Alive and X-Shot plastic dart blasters, and the Millie Moon and Rascals brands of diapers in China – and sells them in US outlets including Walmart and Target.

That has landed the firm at the sharp end of Mr Trump’s

145 per cent tariff on imports from China.

“At the tariff levels right now, in toys at least, those retail prices need to nearly double,” Mr Mowbray said in a telephone interview from Los Angeles. “We are in the same bucket as most of our competitors, given 80 per cent of toys are made in China. Trump is probably going to steal Christmas from families and kids across the US.”

Mr Mowbray, 40, built his fortune from a network of factories in Asia’s biggest economy. The New Zealander moved to China with his older brother Mat more than two decades ago and started Zuru, growing it to compete with toy heavyweights such as Mattel and Hasbro. Now, the bet that gave rise to his toy empire is at risk.

Zuru, headquartered in Hong Kong, estimates it will ship about NZ$2.2 billion (S$1.7 billion) of product into the US in 2025, which accounts for half of its sales globally. 

“If we were looking at 145 per cent tariff on that, that would be nearly NZ$3 billion in tariffs, which is obviously impossible,” he said. “It’s not financially viable.”

Zuru is negotiating with retailers, many of whom have paused orders, Mr Mowbray said.

“We’re reviewing our retail prices every day. They have to go up significantly,” he said. “We have to review how much of the tariff we are willing to absorb ourselves.”

Since Mr Trump announced the tariffs in April, the brothers – along with Zuru’s top management – have held near-daily calls to chart a path forward, closely following US discussions around temporary exemptions for certain sectors.

Mr Mowbray said moving the company’s manufacturing to the US is not an option.

When it comes to toy-making, China has “a deep, deep ecosystem and the supply chain is very tight”, he said. “It’s very difficult even to go to places like Vietnam or India because the supply chain just doesn’t exist in the same way as it does in China.”

Zuru has grown organically since it started, with its founders declining to borrow anything other than an initial start-up loan from their parents. 

They had been in discussions about a potential initial public offering to help fund further expansion. That is now on hold.

“We’ve spent 22 years building this, and one or two people can upset it so much,” Mr Mowbray said. “It’s a little bit hard to comprehend.” BLOOMBERG