President Trump’s move to tack an additional 10% tariff on U.S. imports from China could lead Mattel to hike the price of its Barbie, Hot Wheels and other toys.
Mattel Chief Financial Officer Anthony DiSilvestro said in an earnings call with Wall Street analysts on Tuesday that roughly 40% of the company’s toys are made in China, while noting that is less than the industry average of 80%. Overall, the fresh U.S. levies on Chinese good affect about 20% of Mattel’s global production.
“Against the tariff, we have a range of mitigating actions,” including “potential price increases,” he said.
“We do work closely with our retail partners to achieve the right balance and always keep consumers in mind when we consider pricing actions,” DiSilvestro added.
Mr. Trump has also imposed 25% tariffs on imports from Mexico, where Mattel sources almost 10% of its products, and on Canada. On Monday, the president paused those tariffs for at least 30 days after Mexico and Canada agreed to heighten security at their respective borders with the U.S.
Mattel executives spoke to analysts after the company reported fourth-quarter earnings and sales that surpassed expectations, with its vehicle toy category — fueled by its Hot Wheels brand — its fastest-growing segment.
Demand for dolls and baby gear fell, with the former “down primarily due to Barbie as we wrapped the movie in the prior year,” Mattel CEO Ynon Kreis said in the call.
Toy sellers fear the steeper U.S. tariffs on China will hurt their business.
“We’re going to suffer as a small business, but so is everyone in this country,” Dan Marshall, co-owner of family-run Mischief Toy Store in St. Paul, Minnesota, told CBS News Minnesota this week. Marshall said there are few toy manufacturers left in the U.S., and the tariffs could have an adverse impact.
“If we have to raise prices, we will. But obviously, we’re trying to bring in products now, earlier in the year so we don’t have to do that, but we have no idea and that’s part of the problem,” he said.
Implementing the 10% tariff on China, along with the 25% duties on imports from Canada and Mexico that are now on hold, would cost the typical U.S. household more than $1,200 a year, according to the Peterson Institute for International Economics.
