Hasbro Toying with Tariffs


Let’s stipulate that, as a general proposition, tariffs are bad.  Of course, such stipulations don’t provide quick and clean answers to every particular question.  As a general proposition, cutting people open is bad, too, as is punching them, but if you’re performing surgery or defending yourself, the general proposition doesn’t apply.  Losing your job isn’t great, either, but it doesn’t end your life, and you can adjust and even wind up better off than you were.

None of this is meant to offer support for any specific policy or trade war, but only as an encouragement toward a more comprehensive view.  Just so, the CEO of Hasbro is taking tariffs on China as an opportunity:

Hasbro shifting its business out of China has been positive for the company, according to its CEO. «It’s gone very well for us,» Brian Goldner told CNBC on Tuesday.

The toy company has been focused on diversifying its manufacturing operations since 2012 due to «enterprise risk reasons,» he said.

«We’re seeing great opportunities in Vietnam, India and other territories like Mexico. We’re doing even more in the U.S. We brought Play-Doh back to the U.S. last year,» Goldner said on «Squawk on the Street.»

Of course, that one industry giant is happy to adjust to this reality isn’t definitive proof that the tariffs are a net gain.  Market leaders often don’t mind restrictions, provided they create roadblocks for smaller competitors, too, because big players can better overcome artificial hurdles.

Moreover, the fact that the cost is artificial means that it is drawing resources away from something else altogether.  Writ large, the world is now paying more for toys, and those resources have to come from somewhere.

The question is: Are these costs worth the gains?  Such questions will always be subject to opinion, and it’s too early to tell, anyway.  Still, it’s worth remembering to ask them.