Trump threatens to impose additional tariffs, and LABUBU is overjoyed.
Author | Xie Yunzi
Editor | Zhang Fan
On October 10 local time, Trump posted on the social media platform Truth Social, threatening to implement "massive tariff hikes" on goods imported from China, citing China's plan to impose new controls on rare - earth exports.
Trump said in the post that if Beijing proceeds with export restrictions, the United States will "take the harshest economic counter - measures in history." Analysts believe that this statement indicates that the trade tension between China and the United States has heated up again.
Affected by this news, the U.S. stock market fell immediately.
As of the time of writing on October 12, the Nasdaq fell more than 3.5%, the S&P 500 index fell more than 2.7%, and the Dow Jones Industrial Average dropped 1.9%. Investors generally worry that if the trade dispute between China and the United States escalates again, it may further impact the global supply chain and bring new uncertainties to the already sluggish world economy.
At the Switzerland talks in May this year, the leading officials of China and the United States in economic and trade affairs reached an agreement on Trump's previous 145% tariff increase policy. The United States almost revoked all the tariffs imposed on China since April, only retaining a 10% surcharge. Meanwhile, the two sides also agreed on a 90 - day cooling - off period and promised to continue dialogue through a special consultation mechanism. China's firm opposition to the U.S. abuse of tariffs has never changed.
The impact of the previous wave of tariff wars on import and export enterprises is self - evident. Among them, labor - intensive industries are most affected by tariff fluctuations, and the toy industry has become a microcosm for observation.
Due to the low added value of products, the traditional toy manufacturing industry often relies on quantity to win. However, the doubled tariffs even exceeded the value of the products themselves. Both contract manufacturers and distributors had to suspend production and trade.
After the Switzerland talks, Forman, the CEO of the U.S. toy company Basic Fun, said that under the huge 145% tariff imposed on China by the Trump administration, the company had to freeze almost all toy products from China, including the globally popular Care Bears and Tonka trucks.
The Financial Times of the UK also pointed out that from microwaves to Barbie dolls, U.S. consumers are highly dependent on Chinese products. In 2024, three - quarters of the dolls, tricycles, scooters and other toys purchased by Americans were made in China. According to Jiemian's report, the export value of toys in Guangdong Province in 2024 was $14.811 billion, contributing more than 37% of the "Made in China" toys to the world.
The picture is from Toubao Research Institute
The export value of Chinese toys to the United States and its year - on - year change from January to June 2025 (Unit: $100 million); The picture is from Huafu Securities
However, not all toy industries are affected by tariff shocks. A new category derived from traditional toys, such as trendy toys and IP derivatives, is not greatly affected by tariff shocks.
"Tariffs do have a certain impact on us, but the impact is not that big because tariffs are based on the entire production cost," Si De, the chief operating officer of Pop Mart, said at a previous earnings conference. According to him, the company made a worse - case prediction for tariffs when making budgets internally and thus made sufficient preparations.
On the one hand, it is to transfer the supply chain.
For Chinese enterprises going global, Vietnamese factories can avoid tariffs through the Vietnam - EU Free Trade Agreement. Although the labor cost in Vietnam has increased to some extent since 2025, in the surveys of some institutions, the average wage in Vietnam's manufacturing sector is still 60% to 70% of that in the Yangtze River Delta and Pearl River Delta regions of China.
In January 2024, Pop Mart's Vietnamese factory was officially put into operation. Available data shows that the monthly production capacity of the factory has soared from 300,000 at the beginning of 2024 to 10 million in March 2025. At Pop Mart's 2024 earnings conference, the company's executives also revealed that the production capacity of the Vietnamese factory has accounted for 10% of the total production capacity.
On the other hand, Pop Mart's countermeasure is to increase the prices of products including those in the U.S. market. Si De emphasized that there will be no overall price increase, and only the prices of some products may be adjusted.
In fact, the prices of Pop Mart's products in the overseas market have always been higher than those in the domestic market.
Wen Deyi, the president of Pop Mart's international business, once told 36Kr that considering factors such as taxes, labor costs, and exchange - rate fluctuations, Pop Mart sets different product prices in each country or region. For example, the product prices in Thailand are generally 5% to 10% higher than those in the domestic market.
According to Morgan Stanley's calculation, in April, the price of Pop Mart's basic - style blind boxes in the U.S. market was $16.99, and the import cost at that time was about $4.2. If the tariff is increased by 30%, the import cost will rise to $5.4. To maintain a 75% gross profit margin, the product price needs to be increased to $21.8, a price - increase rate of 28%.
In May, Pop Mart announced a price increase for some blind - box products in the U.S. market. Among them, the price of the Gift For You series products was raised to $20.99, and the price of the Ono Echo series was raised to $18.99.
Screenshot from Pop Mart's U.S. official website by 36Kr
But this has not stopped the American people's love for Pop Mart, especially LABUBU.
A research report by Morgan Stanley at the end of September this year showed that although Pop Mart's market in the United States is still in its early stage of development, there is no other toy store or IP store that can provide the same consumer experience as Pop Mart.
Among the 6 Pop Mart stores in the United States actually visited by Morgan Stanley, the passenger flow and transaction volume of 5 stores were significantly higher than those of surrounding stores, second only to Apple. However, the report still believes that there is still room for optimization of Pop Mart's stores in the United States. The area of some stores is too small, only about 100 square meters, and the digital operation means need to be improved.
Screenshot from Morgan Stanley's research report by 36Kr
It is a clear fact that the United States has always been one of the fastest - growing overseas markets for Pop Mart.
Since 2025, relying on the star effect and the scarcity of products, LABUBU has become popular in Europe and the United States. Some consumers even fought with each other to snap up LABUBU products.
Although Pop Mart has been increasing production capacity to crack down on scalpers and control the prices in the second - hand market, if Trump launches a tariff war again and the impact of the tariff increase is transmitted to the retail end, the scarcity of Pop Mart's products will increase, which may trigger another wave of price increases and panic buying.
The earnings report shows that in the first half of this year, Pop Mart's revenue reached 13.88 billion yuan, a year - on - year increase of 204.4%. Among them, the revenue from the overseas market accounted for more than 40%, and the gross profit margin of sales was as high as 75.5%, further boosting the company's overall gross profit margin.
Looking at specific regions, excluding the Chinese market, the revenue in the Asia - Pacific region in the first half of the year reached 2.85 billion yuan, a year - on - year increase of 257.8%; the revenue in the American market reached 2.26 billion yuan, a year - on - year increase of 1142.3%; the revenue in Europe and other regions was 480 million yuan, a year - on - year increase of 729.2%.
In terms of the number of stores, it is expected that by the end of 2025, Pop Mart will have more than 200 overseas stores. Focusing on the U.S. market, on September 6, Pop Mart just entered Sacramento, the capital of California. Morgan Stanley's latest report said that the number of Pop Mart stores in the United States has reached 50, but most of them are located in residential areas, and the number in core business centers (such as Midtown Manhattan) is relatively small.
At the interim earnings conference, Si De clearly stated that Pop Mart will increase its resource investment in the U.S. market.
"First, the U.S. market is very large and has strong purchasing power. Second, U.S. consumers have a stronger demand for IP design and peripheral derivatives. Third, the U.S. retail market is very mature, with abundant shopping - center systems and retail talents."
At the same time, he also revealed that Pop Mart has full confidence in the growth of the North American market, and store - opening will still focus on quality. Starting from next year, the company will open flagship stores in several major U.S. cities in excellent locations. In addition to offline stores, the influence of Pop Mart's official website and APP has also increased. In the first half of this year, Pop Mart once topped the shopping list on the U.S. APP STORE.
Some analysts believe that as Pop Mart accelerates the formation of scale effects in the overseas market, the gross profit margin of sales is expected to continue to increase. At the same time, the development of the overseas market will also feed back the popularity of Pop Mart in the domestic market and the capital market, which will promote the overall development of the company.
At the close of trading on October 11, Pop Mart was quoted at HK$259.6 per share, with a market value of HK$348.628 billion.
*Disclaimer:
The content of this article only represents the author's views.
The market is risky, and investment should be cautious. In any case, the information in this article or the opinions expressed do not constitute investment advice to anyone. Before making an investment decision, if necessary, investors must consult professionals and make careful decisions. We have no intention to provide underwriting services or any services that require specific qualifications or licenses for all parties in the transaction.
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This article is from the WeChat public account "36Kr Finance", author: Xie Yunzi Zhang Fan, published by 36Kr with authorization.