MGA Entertainment, based in California, makes Bratz and LOL Surprise! dolls and other toys mainly in China. MGA Entertainment is taking steps to move 40% of its production to India, Vietnam and Indonesia within six months or so, up from about 10% to 15% now, Chief Executive Officer Isaac Larian told Reuters.

Mr. Isaac added that about 60% of MGA Entertainment’s production will still be in China, after shifting more rapidly to India, Vietnam and Indonesia in the coming months. He noted that MGA Entertainment has had to raise wholesale prices for products made in China to protect its already thin margins. “This will hurt consumers because we have to pass on more costs to retailers,” he said.

The MGA plan shows that American manufacturers that rely heavily on Chinese factories are adjusting as quickly as possible to the Trump administration’s trade war with China. They are also raising prices to cover the cost of tariffs on remaining products made in China.

Chinese factories now produce about 77% of American toys, according to the Toy Association, forcing companies like Barbie maker Mattel to consider raising prices to offset the cumulative 20% tariffs on Chinese goods. Mattel also plans to reduce its reliance on and consider closing a factory in China by the end of the year, according to Reuters.

Higher prices are likely to hit retailers' shelves at the start of the school year, and a 20% tariff could mean a price increase of as much as 20%, said Greg Ahearn, CEO of the Toy Association.

Chinese officials met with representatives of Walmart (the world's largest grocery retailer) this week to discuss media reports that Walmart has asked Chinese suppliers to reduce prices to offset the impact of tariffs imposed by the Trump administration, according to Reuters citing social media posts affiliated with China Central Television (CCTV).

Mr Trump imposed a 10% tariff on all imports from China in early February, on top of existing tariffs, and doubled it to 20% earlier this month.

Before Mr. Trump imposed new tariffs on imports from China, Walmart supplier MGA Entertainment had planned to move about 20% to 25% of its production from China to other countries within the same six-month time frame, according to Larian CEO.