Mattel’s Response to Tariffs and Economic Uncertainty
Mattel, the company behind Barbie, has expressed concerns that Donald Trump’s significant tariffs will lead to increased prices for some products in the U.S. This is because the tariffs will raise costs for toy manufacturers.
The United States accounts for roughly half of Mattel’s global toy sales, with about 20% of those products imported from China. However, Mattel plans to decrease its imports from China to below 15% by 2026.
Given the unpredictable economic climate and changes in the U.S. tariff landscape, Mattel finds it challenging to forecast consumer spending and sales for the remainder of the year, particularly for the holiday season. As a result, the toy company has withdrawn its annual financial targets.
In terms of pricing, Mattel has indicated that it will make adjustments in its U.S. operations “when necessary” due to the impact of tariffs.
On a related note, automaker Ford has also reported that the president’s tariffs could cost the company around $1.5 billion this year alone. The automotive giant anticipates that tariffs will contribute an additional $2.5 billion to its overall expenditures, primarily from rising import prices from Mexico and Canada. Ford, however, expects to cut about $1 billion from these costs through various means.
Since Trump’s administration began earlier this year, both the U.S. and China have imposed tariffs on each other’s goods, exceeding 100%. This has evidently disrupted many sectors, with several companies halting production and shipments to the U.S. due to Chinese tariffs. The Toy Association has been working to counteract the negative effects of these tariffs.
Mattel has adjusted its supply chain to reduce reliance on Chinese products. For instance, they are ramping up production of UNO card games in India to cater to the U.S. market, thus lessening dependency on China for international customers.
Besides China, Mattel also imports toys like Barbie Dolls and Hot Wheels from countries such as Indonesia, Malaysia, and Thailand, which have also been impacted by tariffs from the Trump administration earlier this April—though those tariffs were temporarily suspended for 90 days.
Looking ahead, Mattel anticipates incurring an additional $270 million in costs beginning in the July quarter due to these tariffs, though it expects to offset these costs through various mitigation strategies.
“Toy manufacturers are definitely feeling the brunt of Trump’s tariff policies,” noted Zak Stambor, a senior analyst at Emarketer. Mattel has set a goal for annual net sales growth between 2% and 3% going forward.
