Brian Goldner also confirmed that the US consumer will bear the costs of the new tariffs.
In an interview with CNBC, Hasbro CEO Brian Goldner confirmed that the company has been diversifying its manufacturing operations since 2012 due to “enterprise risk reasons. We’re seeing an opportunity that will lead us, by the end of 2020, to be at about 50% or under for the US market coming out of China. We believe by 2023, we should be under a third. We’re seeing great opportunities in Vietnam, India and other territories like Mexico. We’re doing even more in the US We brought Play-Doh back to the US last year.”
As the US /China trade dispute has intensified over the past month, President Donald Trump has urged US companies to leave China. He said in a tweet (sic): “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
According to Brian Goldner, this request isn’t wholly impractical: “In the US, we produce about 20% of our revenues for our US business. Globally, it’s about two-thirds of our business coming out of China, but that’s down substantially from nearly 90% in 2012.”
Although Hasbro feels confident that it will be able to move most of its business out of China in the near future, it still expects to be hit with the 10% tariffs that president Trump announced earlier this month, but later delayed until December. “I’m glad to see that the administration has put off putting tariffs on our category until later, closer to the holidays,” Brian commented. “We’re having conversations with our retailers and of course we will pass along those costs. Ultimately, they will be borne by the consumer. With time, you can redesign and redevelop your product lines with those tariffs in mind, but in the short term, you do need to pass along those costs.”