Barbies and Hot Wheels Could be More Expensive Under Trump Tariffs

Mattel May Raise Toy Prices Due to Tariffs, Executives Say

Tariffs’ Impact on Toys

Mattel, the largest toy manufacturer, may increase the prices of toys such as Barbie and Hot Wheels in response to new tariffs imposed by President Donald Trump, according to executives.

Supply Chain Mitigation

The toy giant, which manufactures about 40% of its toys in China and less than 10% in Mexico, told analysts that it will look to move its supply chain around to mitigate the effect of the tariffs. Additionally, the company is considering potential price hikes. "Certainly against the tariff, we have a range of mitigating actions," said finance chief Anthony DiSilvestro on the company’s fiscal fourth-quarter earnings call.

Potential Price Increases

While Mattel does not plan to absorb the full cost of the tariffs, DiSilvestro mentioned that price increases are "a potential avenue" to deal with the issue. He stressed that the company works closely with its retail partners to achieve a balance between reducing costs and ensuring consumers are considered when pricing decisions are made.

Tariff Impact on Economies

Experts on both sides of the political aisle agree that the tariffs will likely lead to price increases for consumers. It is unclear if Trump will ultimately impose the duties on Mexico and Canada, which have already halted planned 25% duties and bolstered their border security as a result of the threat.

Global Perspective

China is the largest provider of toys and games to Mattel, making up about 80% of its global toy supply. A 10% tariff on goods from China, as announced by Trump, is expected to significantly impact the industry. Mattel has a presence in seven different countries, both through its own and third-party factories, providing some flexibility in its supply chain.

Price Hike Anticipation

By 2027, Mattel expects sourcing from Mexico and China to represent less than 25% of global production, a significant decrease from the current 50%. Should the tariffs become permanent, toy manufacturers like Mattel may increase prices to pass on the added costs to consumers.

Related Content