At a bustling workshop in Yiyu Craftwork Co, a toy factory in Chenghai district in Shantou city, South China's Guangdong Province, workers lean over sewing machines, rapidly stitching red-and-white Santa hats and glittery ornaments. These festive exports will soon cross oceans, destined for Christmas displays in stores across the US and Europe, just as global buyers rush to place orders before a 90-day US tariff reprieve expires.

As uncertainty lingers over US tariffs on Chinese toy imports, Chenghai is navigating a period of adjustment and transition. In April, the Trump administration announced a 90-day suspension of planned tariff hikes on certain Chinese-made toys, offering a temporary window of relief.

The move has triggered a wave of orders from US buyers, with some rushing to restock regular inventory and others placing early Christmas orders, including consistent orders from major US retailers such as Target, Walmart and Home Depot, driving a notable rebound in demand that rose more than 10 percent year-on-year, local business owners told the Global Times.

China's exports of dolls and stuffed animal toys reached 13.3 billion yuan ($1.84 billion) in the first four months of 2025, up 9.6 percent year-on-year, according to customs data released Monday.

Chenghai is China's largest toy production and trade hub, accounting for over 50 percent of China's plastic toy output and about one-third of global supply. In 2024, the district exported toys worth 10.24 billion yuan, according to China Media Group.

Irreplaceable advantages

"Although the tariffs are imposed on US importers, the pressure inevitably trickles down to us," said Qiu Zhihong, head of Shantou Daye Plastic Toys Co, a Chenghai-based exporter of high-end smart toys. He told the Global Times that US buyers often ask Chinese suppliers to share the burden by cutting prices slightly. "Margins are already razor-thin, so we can't fully meet those demands, but they end up buying anyway, because Chinese-made toys remain irreplaceable in the global market," Qiu said.

He stressed that it's ultimately US importers and consumers who foot the bill. "They can't stop buying because Chinese toys are better made, reach the market faster and offer unmatched variety." In short, it's the US market that takes the bigger hit.

Even US industry leaders acknowledge the pressure of rising cost. Hasbro CEO Chris Cocks warned that US toy prices could increase later this year, noting that China remains one of the company's key suppliers, according to a CNN report.

Jay Foreman, CEO of Basic Fun!, noted that while the company has expanded sourcing to Vietnam and Indonesia, production costs there remain higher than in China. "It's not cost-effective necessarily to move out of China," he said, according to PBS News.

Beyond traditional toys, the rise of high-end products is making Chenghai more competitive and appealing to global buyers.

Qiu said his company has introduced a range of smart, interactive toys over the past two years, riding the wave of AI-driven innovation — with sales growing despite market headwinds. "US consumers are drawn to tech-based toys, and premium interactive products are clearly part of the digital future," he noted. "Southeast Asia still can't produce at this level — we have a strong advantage in both production capacity and supply chain integration."

"About one-third of the Christmas goods sold in the US come from Chenghai," said Guo Bo, general manager of Yiyu Craftwork Co, another Chenghai-based company specializing in Christmas products. He acknowledged that when tariffs surged past 50 percent, exports came under pressure. However, as US importers and retailers found it difficult to forgo the value of Chinese-made goods, orders rebounded sharply once the 90-day tariff pause took effect.

"They're worried tariffs will rise again after the window closes, so they're rushing to stock up," Guo said. "What used to be a three-month lead time has been cut to two, now everyone's scrambling to deliver."

"May and June are usually peak export months, but concerns over tariffs have led foreign buyers to place even more orders," Guo said. "That created a shipping surge on our side, though traders on both ends are eager to get goods delivered as quickly as possible."

Diversified markets boost stability

To boost competitiveness and expand market reach, some firms in Chenghai are moving beyond OEM by building their own brands. At Guangdong Yuxing Technology Industrial Co, workers are testing AI-powered mechanical block sets under the Mould King label, a brand that has gained strong traction in Europe and the US with original designs featuring muscle cars, trains, and iconic landmarks.

"We have our own R&D team and are now developing programmable modules to stand out with more tech-driven products," said Xie Weichun, general manager of the company told the Global Times.

Xie sees the 90-day window as a short-term variable. For him, the real path forward lies in "building a more resilient global supply network." He said that the company now has stable clients in Germany, France, the Netherlands and Malaysia, and plans to step up local marketing and distribution efforts.

"We can't put all our eggs in one basket," Guo said, adding that his company is expanding into Belt and Road markets, where countries in the Middle East, Central Asia and Southeast Asia also celebrate Christmas or similar holidays, fueling a rise in orders and inquiries. At the same time, the company is tapping into China's booming cultural and creative market with fabric-based IP toys aimed at domestic consumers.

Qiu said his company offers products across multiple price points and has offices in the US, the Netherlands and Hong Kong, with design teams in Hong Kong and London to better localize development and cater to different market preferences. "The US remains our main market," he noted. "But we're actively growing our presence elsewhere to balance the risks."

Despite ongoing global uncertainty, Chenghai's strategy is taking shape: pursuing growth through market diversification, building value through high-end production, and seeking certainty through brand development.

As the shipping deadline nears, lights at Yiyu Craftwork Co stay on late. Workers rush to finish Santa hats and snowman ornaments, a response to uncertainty, a display of China's manufacturing resilience and proof of enduring global demand.

(Source: Global Times)