Free editorial. No brand paid for this article. This is general information, not legal, customs or tax advice. Tariff rates, exemptions and fees change; confirm them before you order or file an entry.
A toy manufacturer that depends on one factory in one country is making a bet: that tariffs, port delays, factory closures and enforcement actions will all stay manageable at the same time.
“China Plus One” is a plain idea. Keep a source you already know how to work with, and add a second source in another country so a shock in the first place does not stop the line. For many U.S. toy manufacturers, the second country under discussion is Vietnam, India or Mexico — not because any of them is automatically cheaper, but because each one changes the risk, the transit time, and the duty stack in a different way.
The work is to compare landed cost and reliability, not only the unit price on a factory quotation.
Start with landed cost, not the ex-factory price
A useful landed-cost sheet for a U.S. import has at least these lines, for the same product, from each factory you are comparing:
- The ex-factory or FOB price, in the currency you will actually pay, and who pays inland freight to the port
- International freight and insurance
- Additional duties that apply to that country of origin and that exact Harmonized Tariff Schedule (HTS) number
- U.S. Customs and Border Protection (CBP) user fees
- Testing, sampling, and any extra packaging needed for that plant
- Time: how many weeks the goods are in production and in transit before you can invoice a customer
On the official CBP User Fee Table (recheck this, because the amounts are adjusted), a formal entry currently carries a merchandise processing fee of 0.3464 percent ad valorem, with a $34.58 minimum and a $670.86 maximum, and ocean imports also carry a harbor maintenance fee of 0.125 percent ad valorem of the merchandise. Those fees are not a substitute for duty, and they apply on top of it.
Duty is the line that has moved the most. Many toy products classified in heading 9503 have a free general (most-favored-nation) rate in the HTS, which is why the additional measures often matter more than the base rate. Confirm your exact 10-digit number in the official Harmonized Tariff Schedule. Do not assume a rate you used last season still applies.
As of July 24, 2026, the Office of the U.S. Trade Representative has in effect additional Section 301 duties from investigations into whether certain economies impose and enforce a prohibition on goods produced with forced labor. The official notice, published in the Federal Register on July 28, 2026 (91 FR 47318), describes two main tiers: a 10 percent additional duty for economies that have imposed such a prohibition, committed to impose and enforce one, or put in place a partial regime with that effect; and a 12.5 percent additional duty for other investigated economies. Some products are treated net of the most-favored-nation rate, and Annexes I and II list exemptions. The notice is the official source; this article does not assign a final stacked rate to a specific country or toy line, because the annexes and later modifications have to be read against your HTS number and country of origin.
Have a licensed customs broker run the comparison for the SKUs you actually import. A one-point mistake on a full container is more expensive than the phone call.
Official trade data, and what it cannot decide for you
China has long been the largest supplier of U.S. toy imports, with Vietnam and Mexico among the next sources buyers look to, and India a smaller but real option for some products. For current annual values, pull heading 9503 (and any other heading you actually use) from official systems: the U.S. Census Bureau’s USA Trade Online and merchandise trade files, or the U.S. International Trade Commission’s DataWeb. The Commission has published complete 2025 annual trade statistics. Those tables will tell you where U.S. imports have been coming from. They will not tell you whether your mold, fabric or quality standard can move.
Mexico’s additional advantage, when the goods qualify, is preferential treatment under the United States-Mexico-Canada Agreement (USMCA). Qualification depends on the rules of origin, not on the factory’s address alone. CBP and the USTR publish the official rules and guidance. Nearshoring can also shorten ocean or land transit compared with a Pacific crossing — which matters as much for cash flow as for the freight line on the invoice.
Vietnam has become a major alternative production base for toys and related goods. India is often discussed for plush, wood, and simpler molded items, and for capacity that is still being built. In every case, the first questions are the same: Can the plant hold your quality and your volume? Can it document where materials come from? Can it ship on the calendar your retailers actually require?
Compliance does not reset when the country does
A toy designed or intended primarily for children 12 and under in the United States still has to meet the applicable toy-safety rules, including the mandatory ASTM F963 standard, third-party testing at a CPSC-accepted laboratory, a Children’s Product Certificate, and tracking labels. The U.S. Consumer Product Safety Commission’s toy safety business guidance is the starting point. A new factory does not get you a shortcut.
Forced-labor enforcement is also not limited to one country. CBP administers the Uyghur Forced Labor Prevention Act and publishes importer guidance on due diligence, supply-chain tracing and how detentions are handled. If you cannot show where sensitive inputs came from, a cheaper quotation is not a bargain.
Most firms have felt the cost. Few have changed suppliers.
The Federal Reserve Banks’ 2026 Report on Employer Firms (2025 Small Business Credit Survey) found that 48 percent of small employer firms sourced at least some inputs from outside the United States in 2024, and 14 percent did so for more than half of their inputs. A large majority of firms with foreign inputs reported year-over-year price increases on those inputs. Seventy-six percent of those firms passed at least some of the higher costs on to customers, and 60 percent absorbed at least some of them. Relatively few changed to a domestic supplier (13 percent) or to a different foreign supplier (8 percent), and only 3 percent reported relocating production to the United States.
Those figures are for small firms across industries, not only toy manufacturers. They do show that many companies have taken the cost hit without yet building a second source. That is the opening, and also the warning: moving late, in a hurry, is how quality and documentation slip.
A dual-source starter plan
- Pick one or two SKUs, not the hardest item in the catalog. Plush, wood, or a simple injection-molded piece is usually a better first transfer than a product with a unique mechanism, licensed decoration, or a tight color match.
- Ask for a paid pilot, with your own quality checklist. A quotation is not a run. Order a pilot quantity, test it the same way you test the current plant, and keep the samples.
- Build a landed-cost sheet for both sources, including time. A slightly higher unit price with a shorter transit and a more predictable duty stack can be the cheaper option once cash flow is counted.
- Confirm country of origin and USMCA claims with a broker, in writing. Do not print “Made in …” or claim preference until the rule has been applied to this bill of materials.
- Keep the first factory in the plan until the second plant has shipped more than once. “Plus One” means two sources, not a sudden swap.
- Tell your buyers what will be in stock, and when. A specialty store that cannot rely on your ship date will not wait for your sourcing project to finish.
Keep buyers able to find you while you re-source
A second factory only helps if retailers can still find the company and see products that are actually available. A ToyDirectory listing keeps your profile, photos and wholesale contact in front of specialty buyers while you add that source. Starter plans begin at $29 a month or $295 a year, with no setup fee, and go live within three business days after we have your payment and your product photos and details.
TDmonthly ToyShow 2027 lists four products for 120 days at $590. Use it for the SKUs you can ship with confidence, not for a line that is still mid-transfer.
We are also building a landed-cost and carton-cube calculator for toy manufacturers, with official CBP fee fields and a blank duty line for the rate your broker confirms. If you want it when it is ready, email [email protected] with the subject “landed-cost calculator,” or call 424-272-6854.
This article is for general information. It is not legal, customs or tax advice. Tariff rates, exemptions, fees and rules of origin change. Confirm the current treatment of your products with a licensed customs broker and the official HTS, CBP and USTR pages before you place an order or file an entry.
Sources
- Office of the U.S. Trade Representative, Notice of Actions in Section 301 Investigations, 91 FR 47318, July 28, 2026
- USTR, Section 301 forced-labor investigations page
- Harmonized Tariff Schedule of the United States
- U.S. International Trade Commission, complete 2025 trade statistics and DataWeb
- U.S. Census Bureau, merchandise trade imports and USA Trade Online
- U.S. Customs and Border Protection, User Fee Table, USMCA, UFLPA, and forced-labor importer guidance
- USTR, USMCA agreement text
- U.S. Consumer Product Safety Commission, Toy Safety Business Guidance; 16 CFR 1250.2
- Federal Reserve Banks, “2026 Report on Employer Firms”, March 3, 2026
- ToyDirectory Get Listed and TDmonthly ToyShow 2027 (prices checked November 14, 2026)
Writer's Bio: Laura N. Larsson covers toy news and trends for TDmonthly. She follows new launches, licensing deals and what retailers are putting on shelves, and she talks with toy manufacturers and store buyers about what is actually selling. Her roundups aim to give retailers, manufacturers and inventors a quick, practical read on where the toy business is heading, with links to the companies and products behind each story. 
