The Energon Pub

The US government has gone through with its tariff threat yesterday with more reciprocal tariffs to come April 2nd. While yesterday's tariffs impacted China, the ones starting April 2nd may impact Vietnam and both these tariffs will impact our Transformers hobby most. Chris Cocks was interviewed specifically about tariffs as it relates to Transformers toys. During this quick interview, Chris Cocks confirmed 2 things:

- Any additional cost due to tariffs will be passed on to the consumer
- To avoid a high price hike on toys targeting mainly kids, toys that target collectors will have the larger price increase

The language used by Chris Cocks strongly insinuates the Generations Transformers line since that's the type of Transformers toys that targets all ages and not just kids. Hasbro believes that demand from collectors is more "inelastic", meaning it is less likely to change if the price increases while a family can't increase their budget for buying toys for their kids.

This means that the rise in price on toys targeting collectors will be disproportionally larger than the increased tariff cost. Collectors will have to make up for the increase in costs of all lines, not just what they collect. And that's why even if the tariffs against Vietnam won't come into effect just yet (if ever), the added costs of tariffs against China for all other products Hasbro still manufactures there will be passed down to collectors.

The interview also confirms that Hasbro was very diligent in the past 3 years in lowering production cost in the Transformers line, though Cocks hopes it was not noticed.

Also, while the tariffs have been put in place partly to stimulate manufacturing to return to the US, Cocks emphasized that the reason the factories are outside the US is due to the low wages. Just to give you an idea of how low, the minimum wage in Vietnam is $0.94 per hour. So coming back to the US is just not an option for them.

You can view the interview on Yahoo:

https://finance.yahoo.com/news/hasbro-c ... qv7grwiXyL

So they lowered production costs for the last 3 years yet the costs of the product itself stayed or even got increased. I understand the retailers also have a say but I'm sure the extra profit went to the big wigs. As for the tariffs themselves, let's see if they do what they're intended for.

Hoping the cost cutting of the last DECADE and a half wasn't noticed by fans more like... LOL.

As much as I commend the TF design team (Hasbro & TT) of mostly doing their best, it was definitely noticed.

The cost cutting should be aimed at the streamlining the shear number of gimmicks lines overlapping each other. Those simple toys that's only targeting the parents who want to pacify their screaming kids at the mall, toys that the kids don't care about, but it's at the right price point that parents can stomach.

But oh well, Cocks' already turning Hasbro into an IP licensing farm. These "value-focused" toy lines will die off soon as 3P licensee won't be so stupid.

Wonder if this will affect all of the preorders that are up. Those prices are set. Don't know if they're guaranteed.

Rodimus Prime wrote:As for the tariffs themselves, let's see if they do what they're intended for.

No chance. Like the article says there's no benefit to them (or any company really) moving the factories to America. Either be levied with a 20% tariff and keep paying workers 94 cents per hour or not pay the 20% and pay American workers $20+ per hours. What company is going to make the move? Not only that but in this case Takara Tomy uses the same factories, so what, is Hasbro supposed to open two factories, one just for North America (where Canada and Mexico will tariffs them) and then leave the others for the rest of the world? Again, no chance. Hasbro will not open another factory just to avoid a 20% tariff.

Emerje

What I can't wait to see is the prices drop back to "normal" if and when the tariffs are removed. Collectors are now Hasbro's cash cows and they'll most probably never lower their prices if and when this absurd situation finally blows over.

He wears his surname quite well. >_>

Rodimus Prime wrote:As for the tariffs themselves, let's see if they do what they're intended for.

Chris Cocks was pretty clear in the interview that the reason for factories outside the US is to take advantage of cheap labor, that’s the key to selling toys at their current prices. Him accepting tariffs and coming up with a strategy to pass it down more to collectors than other demographics means he has no intention of moving the company’s production facilities to the US.

If it's all lines how is it just impacting Collectors?

and so this is gonna be this year's excuse. Every year, there's a "reason" why prices have to shoot up.

I'm sorry with all the terrible things Hasbro has done over the last five-plus years, if anyone thinks at this point that Hasbro's CEO is doing anything that doesn't directly affect his paycheck, you're smoking something and need to share.

While we all wince at the prospect of higher prices on these figures - let us not gloss over the dirty, often unspoken truth laid out there.

Cocks emphasized that the reason the factories are outside the US is due to the low wages. Just to give you an idea of how low, the minimum wage in Vietnam is $0.94 per hour...

It's quite a thing when a company admits that the entire reason they farmed out their manufacturing overseas was so they could make their stuff in slave labor sweatshops. They sought out factories where they could treat the laborers like dirt, and make them work for peanuts.

And mark my words - if anything happens to ease or end these tariffs? Hasbro won't suddenly lower their prices. They are constantly prodding to see how much they can get away with charging before the customers turn their backs on them. I'll be curious to see exactly when the price hikes take effect. Usually it happens really fast. Companies generally can't wait to raise their prices, and move swiftly when there's any excuse to do so.

The answers has been staring at us.. just make Vietnam the 51st state.
Problem, no problem

I think it needs to be said that while 0.94 an hour seems bad it's a living wage in those countries and those people who earn it, eat. The problem in the US is the Minimum Wage laws and overly powerful Unions who have neutered a competitive marketplace in the US. Where I live in NY small business are closing daily because they just can't afford to stay open post Lockdown. Of course Hasbro could set an example and move factories back to the US and deal with minimum wage and all that, but publicly traded companies don't work that way.

I hate to bring this up but the situation might be worse than we think. We in the community classify lines like Earthspark and Cyberworld as kid friendly, but how does Hasbro? My Chuckie Sense tells me that Hasbro only views the Epic Heroes whatever those 2.5" figures are called as their Kids Lines, the ones that heavily draw on their licenses like Marvel and Star Wars. Everything else is collector.

RiddlerJ wrote:If it's all lines how is it just impacting Collectors?

and so this is gonna be this year's excuse. Every year, there's a "reason" why prices have to shoot up.

Watch the clip, its not long. He says it will impact collectors more because that’s the demographic of toys they will up the price on. They wont increase as much the price of toys just for kids because families are less likely to buy if the price goes up. But not collectors.

So collectors will disproportionately pay more to cover tariffs

william-james88 wrote:

RiddlerJ wrote:If it's all lines how is it just impacting Collectors?

and so this is gonna be this year's excuse. Every year, there's a "reason" why prices have to shoot up.

Watch the clip, its not long. He says it will impact collectors more because that’s the kids of toys they will up the price on. They wont increase as much the price of toys just for kids because families are less likely to buy if the price goes up. But not collectors.

So collectors will disproportionately pay more to cover tariffs

I think we'll see collectors waiting for sales and relying on GC more. Perhaps it might be cheaper to buy mainline figures from places like Amazon Japan?

chuckdawg1999 wrote:

william-james88 wrote:

RiddlerJ wrote:If it's all lines how is it just impacting Collectors?

and so this is gonna be this year's excuse. Every year, there's a "reason" why prices have to shoot up.

Watch the clip, its not long. He says it will impact collectors more because that’s the kids of toys they will up the price on. They wont increase as much the price of toys just for kids because families are less likely to buy if the price goes up. But not collectors.

So collectors will disproportionately pay more to cover tariffs

I think we'll see collectors waiting for sales and relying on GC more. Perhaps it might be cheaper to buy mainline figures from places like Amazon Japan?

Definitely not. On April 2nd, Trump is adding reciprocal tariffs on all imports including Japan. So you will see a 10% additional fee on any order on Amazon Japan after that date. Basically importing from Japan means you will incur double the tariffs: one from production (baked into the price) plus an extra import tariff

But to be perfectly fair, while the method and explanation of reciprocal tariffs leaves a lot to be desired, it would catch the USA up with how other countries operate with imports. You often hear of countries like the UK or Canada having customs and duty fees which the US does not have. But with reciprocal tariffs, they would now. I just find the "reciprocal" bit odd since it gives a sense of targeting/retaliating, like this is all a war. The US government should just charge federal sales tax on all imported goods by end users. That doesn't target anyone in particular, it just makes up the difference of you purchasing a product elsewhere and avoiding the sales tax, which would no longer be avoided. A decision like that would not start any kind of trade war and still give more money to the government.

I'm just glad I have "almost" completed my collection. Not many figures I need/want now. This CEO has made some pretty bad decisions and I don't think it is going to go over well(for Transformer fans).

I've had to do some unspeakable things to buy transformers for awhile now so it warms my heart to know that some of you will be joining me soon. Here's a tip, you'll eventually go numb to the nagging feelings of shame and regret. Also, we're all kinda old so it won't be that much longer until we're held by the cold embrace of death.

chuckdawg1999 wrote:I've had to do some unspeakable things to buy transformers for awhile now so it warms my heart to know that some of you will be joining me soon. Here's a tip, you'll eventually go numb to the nagging feelings of shame and regret. Also, we're all kinda old so it won't be that much longer until we're held by the cold embrace of death.

I'm suddenly nostalgic for 12 hours ago, when I was worried this thread spiral into a pointless political debate. Geez.

In the words of a robot from a different franchise, "Should he have really called this the wacky fun-time review?" But seriously, hang in there CD.

Are there any 3P companies who manufacture toys in the U.S.? If so, I could see them benefitting from these tariffs, and then Hasbro's stance on third party products changing pretty fast.

william-james88 wrote: You often hear of countries like the UK or Canada having customs and duty fees which the US does not have. But with reciprocal tariffs, they would now.

Absolutely correct when we buy anything outside Canada and it clears customs. We have always paid 13% duties on the converted Canadian value ($1,000 item we would pay $130 on top of it). This is to protect Canadian businesses who would sell the same item. It is applied to everything though no matter if it is from 1985.

Dino-Snarl wrote:

william-james88 wrote: You often hear of countries like the UK or Canada having customs and duty fees which the US does not have. But with reciprocal tariffs, they would now.

Absolutely correct when we buy anything outside Canada and it clears customs. We have always paid 13% duties on the converted Canadian value ($1,000 item we would pay $130 on top of it). This is to protect Canadian businesses who would sell the same item. It is applied to everything though no matter if it is from 1985.

Haha, buying those vintage TFs from e-bay I see

william-james88 wrote:

Dino-Snarl wrote:

william-james88 wrote: You often hear of countries like the UK or Canada having customs and duty fees which the US does not have. But with reciprocal tariffs, they would now.

Absolutely correct when we buy anything outside Canada and it clears customs. We have always paid 13% duties on the converted Canadian value ($1,000 item we would pay $130 on top of it). This is to protect Canadian businesses who would sell the same item. It is applied to everything though no matter if it is from 1985.

Haha, buying those vintage TFs from e-bay I see

GUILTY

DeathReviews wrote:While we all wince at the prospect of higher prices on these figures - let us not gloss over the dirty, often unspoken truth laid out there.

Cocks emphasized that the reason the factories are outside the US is due to the low wages. Just to give you an idea of how low, the minimum wage in Vietnam is $0.94 per hour...

It's quite a thing when a company admits that the entire reason they farmed out their manufacturing overseas was so they could make their stuff in slave labor sweatshops. They sought out factories where they could treat the laborers like dirt, and make them work for peanuts.

And mark my words - if anything happens to ease or end these tariffs? Hasbro won't suddenly lower their prices. They are constantly prodding to see how much they can get away with charging before the customers turn their backs on them. I'll be curious to see exactly when the price hikes take effect. Usually it happens really fast. Companies generally can't wait to raise their prices, and move swiftly when there's any excuse to do so.

I think that's one of the deeper issues here too. That these are relying so heavily on underpaid sweatshop workers is ridiculous.
Given Hasbro's trend of just bumping up the price on things too, it does feel like this is more-so dedicated to attempting to give an excuse rather than an actual reasoning for it. Like others have said, if tariffs decrease on these items, prices won't go back down.

Maybe we'll see a streamlining of size classes, smaller figures at a lower price point.

chuckdawg1999 wrote:Maybe we'll see a streamlining of size classes, smaller figures at a lower price point.

I dunno, feels a bit weird for them to do that right after deleting the core class. Fewer large figures is fine, but I doubt they'll immediately go back to core and etc.

Mudwire wrote:

chuckdawg1999 wrote:Maybe we'll see a streamlining of size classes, smaller figures at a lower price point.

I dunno, feels a bit weird for them to do that right after deleting the core class. Fewer large figures is fine, but I doubt they'll immediately go back to core and etc.

I'm thinking just deluxe.