BBC trace puts a Chinese factory's profit on a $30 toy at 18 to 60 cents

Add the factory price to the freight and the BBC's trace accounts for $6.60 of a $30 toy, or 22% of the shelf price ^[19]. The remaining $23.40 is what the tariff and every other cost and margin after the port must come out of ^[20]. The text of the BBC report breaks off in the middle of its account of the US border, before it gives the tariff rate or says what last month's talks between President Trump and Xi Jinping changed ^[14]. How much of the $23.40 the duty takes is therefore not stated.

Jay Foreman, chief executive of the US toy firm Basic Fun, said Chinese factories typically make a profit of between 3% and 10% ^[1]. On the $6 factory price that is 18 to 60 cents ^[17], or between 0.6% and 2% of the shelf price ^[18]. In our view that range is the right comparison for any tariff figure that follows: a duty above 60 cents a toy that fell on the factory would exceed even the top-end profit ^[17].

The inputs are thin. The 20% factory share is Mihox's own figure, from Melanie Wang of its sales team ^[7]. Foreman's range is his estimate for Chinese factories in general ^[1]. The 18 to 60 cents is a range built from two separate sources.

The wage gap argues for leaving China. Samson Ko, president of the Toys Manufacturers' Association of Hong Kong, said Chinese labour is no longer cheap after recent rises ^[16], and one report put average pay in Vietnam at about half China's at the start of this year ^[12]. Ko's explanation for why his members have mostly stayed is proximity ^[11]. A single toy can pass through moulding, electronics, sewing and final assembly, often at different factories ^[13]. In Guangdong those facilities sit close together and are used to "working in harmony", he said, which makes the process run more smoothly than in other countries ^[13]. The trade-off is lower pay elsewhere against a cluster that, in Ko's account, runs more smoothly.

Lead times set the pace of any change. Wang said a toy takes one to two years from first idea to finished product ^[5]. Much of that is customers returning to the design, and Wang said: "They modified the design again, again, and again to improve it." ^[15] Once the design is signed off, the mould takes about a month and the production run about three months ^[6], roughly four months in all, followed by 15 to 30 days at sea ^[21]. A toy begun this quarter therefore reaches shelves after that cycle, under tariff terms that are not known yet.