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How Lego got swept up in US-Mexico trade frictions
Manufacturing a Barbie or a Lego brick requires large quantities of plastic, much of which comes from China, the world’s largest producer of the material.
So when Mexico hiked tariffs on the Asian giant at the start of 2026, its toy manufacturers, including local factories of Lego and Barbie-maker Mattel, had mixed emotions.
On the one hand, they cheered the clampdown on cheaper Asian imports but on the other were left wincing at the rising costs of their inputs.
The toy sector is one of a raft of industries impacted by a year of simmering trade tensions between US President Donald Trump’s administration and Mexico, as well as China.
Mexico’s car assembly industry, one of the biggest in the world, is also holding its breath, given its reliance on Chinese-produced car parts.
President Claudia Sheinbaum argues that the tariffs on China, India and other countries with which Mexico has no trade deal, aim to protect Mexican industry from cut-price competition.
Analysts see the levies, however, as an attempt to appease Trump in the run-up to a high-stakes review of Mexico’s three-decade-old trilateral free trade deal with the United States and Canada, USMCA.
Trump accuses China of using Mexico as a tariff-free backdoor into the United States and complains that the USMCA, which his first administration negotiated, is weighted against Washington.
Saving the treaty is crucial for Mexico, which sends over 80 percent of its exports north of the border.
Some Mexican manufacturers say they are prepared to accept the pain of higher input costs if it leads to a positive outcome in the USMCA talks.
– Plastic and chips –
Polyethylene, the plastic used to make toys, is produced locally by the state-owned oil company Pemex.
But according to the toy industry, the company only manufactures 20 percent of what is needed, meaning the rest must be imported.
Many toys now also contain electronic chips, which also come primarily from Asia.
“If you, as a manufacturer, don’t have the supply (of inputs) in the country, what do you do? You go out and find them,” Miguel Angel Martin, president of the Mexican Toy Industry Association, told AFP.
He noted that the Lego sets purchased in the United States and Canada are all made in Mexico and said he hoped that the USMCA review would “be fair and benefit to all three countries.”
– ‘Playing both sides’ –
China is the elephant in the room in the USMCA negotiations.
Canada has been working to diversify its trade relations after being walloped by Trump’s tariffs offensive. In mid-January, it signed a preliminary trade agreement with Beijing.
