Shares of major toy makers Mattel and Hasbro rose on Tuesday after the United States Trade Representative announced it was delaying proposed tariffs that would have applied to toys.
Mattel shares rose 4.64%, while Hasbro climbed 2.75%. Hasbro, which has a market value of $14.7 billion, has gained 43% so far this year, while Mattel, which has a market value of $4 billion, has gained 15% during the same period.
President Donald Trump announced earlier this month that a 10% tariff would go into effect on Sept. 1 on a list of items, including toys. The USTR said in a statement Tuesday that the tariffs on some items, including "certain toys," will be delayed until Dec. 15 or removed.
The timing of the tariffs were a particular source of concern for the toy companies. September is a key shipping month for those companies as they prepare for the holiday shopping season, when the majority of the industry's business occurs.
The USTR said the decision was due to "health, safety, national security and other factors."
"We appreciate the Administration listening to our concerns through the United States Trade Representative comment and hearing process, and applaud today's announcement that tariffs on toys will be delayed until mid-December,' Hasbro said. "We believe this will help mitigate the impact on U.S. consumers this holiday season, and we value the additional time this provides our company to make further progress on our global sourcing plans."
Before the delay, the new tariffs were scheduled to add an additional $300 billion worth of goods to the list of items facing tariffs when imported from China. The delay also applies to imports of cell phones, laptop computers, video game consoles, and some apparel items.
"Although we are waiting for further details, we are pleased the administration will delay tariffs on certain consumer products ... What we really need is an effective strategy to address China's unfair trade practices by working with our allies instead of using unilateral tariffs that cost American jobs and hurt consumers," David French, the National Retail Federations' SVP of government relations, said in a statement.
"We appreciate that the Administration issued a delay for toys and we're relieved that U.S. toy companies will have the opportunity to get shipments in for this holiday season as the immediate impact would have been severe. That said, the threat of tariffs still hangs over the industry's head. Kicking the can down the road again and again makes long-term business decisions incredibly complicated," The Toy Association said in a statement.
Mattel was not immediately available for comment.
Clarification: This post was updated to clarify that some tariffs are being removed and others are being delayed.