The Curious Case of Labubu: What Plush Monsters Teach Us About International Trade Law

Written by: Aina Hidayat and Celestial Darya Suryadi

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The famous labubu plush - Declan Sun via Unsplash

Pop Mart, a Chinese toy company, has taken the global market by storm in recent years for its unique characters, one of them being Labubu. Labubu is a line of collectible monster plush toys, with sharp teeth as their trademark trait. Their figures are constantly released in various sizes and a wide range of colors, outfits, and accessories, attracting collectors to purchase every edition. Moreover, the majority of the company's products are blind boxes, in which buyers are unaware of which figure they will receive, leading them to repeat purchases to get the one they wanted, which drives hype and profit. With Labubu fueling its success, Pop Mart achieved a gross profit margin of nearly 67% in 2024, placing it as the highest Chinese firm with substantial global reach. With much of this success built on Labubu’s personality, this marks an uncommon milestone for Chinese pop culture, achieving wide acceptance within Western markets. Beyond marketing considerations, it represents a dynamic relationship between culture, commerce, and international regulation. 

Blind Boxes - Leo Liu via Unsplash

Market Dynamics

Notably, Labubu costs more in America and Europe than in Asia. A Labubu plush pendant blind box is priced at approximately USD 28 in the United States, while it only costs around CNY 99 (about USD 14) in China. One of the main reasons behind this price gap is tariffs, with Pop Mart facing a cumulative rate of up to 145% under United States President Donald Trump’s renewed wave of tariff hikes since April 2025. However, Pop Mart can earn margins of up to 71-75% in the United States even with such tariffs, while in 2024, the company's average gross margin was only around 67%. This suggests that tariffs aren’t the sole driver of high prices in the Western market. Pop Mart’s strategic premium pricing and limited distribution channel in America and Europe allows it to capitalize on collectors’ demand.  In Asia, Pop Mart operates numerous official stores and other sales channels, making Labubu relatively easy to obtain. In contrast, in America and Europe, official stores and outlets are far fewer, while consumer demand remains high. 

Labubu’s global appeal has inevitably fueled an informal resale market that thrives on scarcity. In cities like Bangkok, official Pop Mart stores often sell out within hours, with products bought off by resellers, who then offer them at more than twice the original price. Tourists and collectors have admitted to paying scalper prices because the official store had run out of stock. This behaviour mirrors that in the luxury fashion culture, where limited availability and hype result in a booming secondary market. Pop Mart’s experience shows how international trade and consumer markets interact. As cross-border demand increases, domestic market regulation and production strategies must adapt to prevent market inefficiencies caused by the grey market. 

Collectively, these market dynamics raise critical international trade law concerns, particularly regarding tariff treatment and custom regulation should apply for high-value, small-parcel imports. 

Tariff Systems

Labubu has held up a mirror showing us the friction points of global trade.  At the multilateral level, the World Trade Organization (WTO) Most Favored Nation (MFN) principle requires that any tariff advantage granted to one member must extend to all. However, the MFN system does not equalize tariffs globally, but merely sets a baseline that allows each country to set its own MFN rate for product categories like toys. Under Harmonized System code 9503, this varies widely, as the EU imposes tariffs of 0%-4.7%, while the United States levies around 10% plus additional duties on Chinese goods.

Regionally, trade frameworks like the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN Free Trade Area (AFTA) have reduced tariffs on manufacturing goods in Asia. Under AFTA’s Common Effective Preferential Tariff scheme (Article 2 CEPT), intra-ASEAN toy trade enjoys tariffs of 0% to 5% duties, keeping the circulation cheaper across the region. In contrast, Western markets lack comparable preferential trade agreements with China, where Pop Mart manufactures. Imports in the West are usually governed by MFN tariffs or further complicated by political disputes, such as the recent US-China tariff war. Although tariffs are lower now, Labubu remains relatively expensive in the US.

Global E-Commerce

Cross-border e-commerce introduces new complexities beyond traditional tariffs. While platforms like AliExpress and Taobao allow Asian products to reach Western consumers, challenges persist. Some countries allow de minimis treatment, like the United States (with the threshold of USD 800), but parcels that exceed the threshold require full custom clearance, VAT, and inspection fees that sharply raise landed costs. Under the WTO Agreement of Custom Valuation (Art. 1), custom duties must be carried under “transactional value” or the actual price paid. Yet, frequent undervaluation and misdeclaration attempts have prompted stricter enforcement. Added shipping, insurance, and administrative costs often erase Asia’s initial price advantage, making collectibles like Labubu more expensive once they cross borders.

In this sense, Labubu operates less like a normal toy and more like a luxury item. Both face custom barriers that inflate prices abroad, they rely on scarcity and exclusivity to drive consumer demand, and both fuel resale markets where values far exceed retail.  Custom authorities treat these collectibles with the same vigilance as a USD 2 million Birkin bag, showing that a plush toy can follow the same economic and regulatory logic as luxury goods.

The Micro-Luxury Regulatory Gap

The reality boils down to two fundamental truths about our modern global economy: (1) micro-luxuries are real, and they matter, and (2) trade regulation must evolve.

Firstly, Labubu is the new “micro-luxury”. It is a small, non-essential item whose value is rooted in scarcity, culture, and community. With economic patterns that reflect a luxury fashion product. Regulators and economists must recognize that the mechanisms of global trade are not limited to bulk commodities; they also include these culturally charged collectibles that command premium prices and cross borders in millions of small parcels. 

Secondly, trade regulations should be updated. Although it is also applied to small parcels, the existing custom system is better suited for bulk B2B trade than for a direct-to-consumer e-commerce model. Therefore, custom regulations require modernization to minimize friction for low-value consignments through a higher de minimis threshold, digitize custom declaration to make the process faster and cheaper, and international cooperation on product standards while maintaining strong consumer protection. 

Pop Mart’s rise represents more than just a collectible craze; it serves as a cultural bridge. What began as a niche blind-box hobby in China has grown into a worldwide community united by creativity, nostalgia, and the thrill of discovery. Yet, this worldwide success simultaneously exposes the complexities of modern trade, such as tariff disparities, e-commerce challenges, and intricate custom regulations. As Pop Mart continues to expand, fans have the power to influence a more transparent and inclusive market. Whether bought from an official store in Beijing or shipped through e-commerce to New York, each Labubu carries the same spark of joy that connects collectors worldwide, showing that even the smallest commodities can reflect the larger forces of globalization.