Hasbro expects to source only 50% of products from China by the end of 2020

The U.S.-China trade war is spurring Hasbro to reduce its reliance on China for making its toys.

China has long been an important country for manufacturing toys: 67% of Hasbro’s products sold in the U.S. came from there last year.

However, as Washington and Beijing slap tariffs on each other’s products, Hasbro is increasing its production in countries other than China.

“We’re increasingly spreading our footprint and adding new geographies for production globally,” Hasbro CEO Brian Goldner said during an earnings call Tuesday. “That includes new production in India and Vietnam.”

Earlier Tuesday, Hasbro posted better-than-expected quarterly earnings, boosted by higher demand for action toys following the success of its “Avengers: Endgame” merchandise. Its stock price jumped 6.7%.

The company also sourced 20% of its products sold in the U.S. from American manufacturers during the year. Hasbro hopes to have only 50% of its products coming from China by the end of 2020.

“We’ve done the work and are prepared to address tariffs if they happen but continue to believe they would be very disruptive to our business and consumers in the near term,” CFO Deb Thomas said on the call.

Thomas noted that consumers would ultimately bear the brunt because retailers would likely raise prices rather than take a hit.