SHAOXING XINGZHOU TEXTILE CO.,LTD , https://www.eurofashiontextile.com
"According to Gaole, the recent increase in import tariffs on toys in Brazil has minimal impact on the company's performance. This is because the volume of exports to Brazil remains relatively low, and thus the company is not significantly affected by the tariff hike.
On the 28th, Brazil’s Foreign Trade Commission (CAMEX) announced a rise in import duties on Chinese toys, increasing the tax rate from 20% to 35%. The move aims to protect domestic toy manufacturers that have been negatively impacted by currency appreciation. In response, several listed Chinese companies, including Gaole and Xinghui RC, stated that their financial performance would remain unaffected.
Analysts note that although around 90% of Brazil’s toy market is supplied by China, local manufacturing capabilities are still underdeveloped. As a result, foreign toy exporters still have a viable market in Brazil. Additionally, the tariff increase does not apply universally, and most of these companies derive the majority of their revenue from Europe and the U.S., further reducing the impact of the new policy.
While the higher tariff in Brazil is a concern, the toy industry faces more pressing challenges, such as currency appreciation, inflation, and rising production costs. According to data from the Ministry of Commerce’s Department of Foreign Trade, from January to November this year, China exported 13.874 billion toys with a total transaction value of $9.335 billion—an increase of 30.3% compared to the same period last year. However, despite the high turnover, net profit margins for toy companies have hit historic lows, currently standing below 4%.
The head of Gaole mentioned that the company is using strategies like hedging and adjusting pricing to mitigate the impact of the renminbi’s appreciation. However, exchange losses are still inevitable. Fortunately, many leading toy companies in the industry have strong brand recognition, allowing them to maintain net profit margins above 10%.
Industry experts warn that as pressure from currency appreciation grows, smaller toy manufacturers may struggle and face closures. This could create opportunities for larger, well-established listed companies to capture more market share."
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