Mattel said he is considering raising prices for US toy shoppers. This is a warning that comes the day after President Donald Trump doubled his comment that American children don’t need more than a few dolls.
“Toys are an important part of a child’s life,” Mattel CEO Ynon Kreiz told CNBC Tuesday morning.
The manufacturer of Barbie dolls and hot wheel cars is “committed to an uninterrupted supply of high quality products at a wide range of affordable prices,” he said.
After years of being in charge of sudden increases in costs for essential items, analysts warned that there are limits to what households want to pay for dolls, games and matchbox cars.
“When it comes to toys, consumers are very price sensitive,” says Brian Benway, senior tech and gaming analyst at market research firm Mintel.
Mattel on Monday predicts 40% to 50% of its products will be under $20, but it warned its first quarter revenue report that it “works in an uncertain macroeconomic environment with significant volatility, including changes in global trade policy.” As a result, the company refrained from providing financial outlook for the year, and Ford also took it on Monday.
The toy maker added that global sales rose 2% from the previous year, “we hope that we will not only manage it over this period, but also strengthen our competitiveness.” However, the latest warning of potential price increases came amid the ongoing turbulence of trade policy, which has seen the company come to light in February, which has led to an increase in alarms from the company’s C-suits.
Mattel’s shares have fallen more than 18% since April 2nd. This is the day Trump unveiled an extensive set of global tariffs that partially returned a few days later. Unstable tariff developments – featuring numerous delays, revisions and surprises, including a new proposal to steal foreign films, is a challenging time for the toy industry, with Trump’s recent remarks entering the spotlight.
“Perhaps kids have two dolls rather than 30 dolls,” Trump said at a cabinet meeting last week.
He immediately campaigned to provide economic relief, but the president and his allies recently suggested that Americans might need to endure short-term pain as the administration’s trade policy took hold.
That could disappoint some of his supporters. At a stop in the Trump campaign in Walker, Michigan in September, a young Chicagoan named Maeve told NBC News:
Trump defended his comments about the Dolls in an interview with NBC News’ Kristen Welker on Sunday.
“The tariffs are going to be great for us,” he said. He said he dismissed concerns about a potential product shortage while showing that Americans can see a narrower range of purchases. “I don’t think a beautiful 11 year old baby girl needs to have 30 dolls. I think she can have 3 dolls or 4 dolls.”
Toys are one of many consumer purchases that analysts expect tariffs to be more expensive. Nearly 80% of toys sold in the US are imported from China, the Toy Association estimates. The industry group says it is advocating “0% mutual tariffs worldwide” to ensure safe, affordable, high-quality toys are accessible to all children.
Benway said over 40% of Mattel’s products are now sold by major countries’ retailers known for their low prices.
“If you’re talking about 145% tariffs, that’s double the cost of toys at Walmart or Target,” he said. “I don’t know how the average consumer will respond to a sudden $40 for a $20 toy just because someone says that. It’s probably not great.”
It is still unclear how much customs related costs will increase. Mattel expects to start watching during the holiday shopping period. Executives also told investors they were ready to increase imports directly if retailers cut inventory, making the items available to U.S. shoppers.
Mattel has less than 20% of US toy production based in China, about half the current level of overall global manufacturing. The company is currently working on “acceleration” efforts to further expand production, including expanding in India, so no country will make up more than 25% of global production by 2027.
On Tuesday, he asked CNBC if Mattel could bring more manufacturing back to the US — one of the top goals in the Trump administration’s tariffs — said, “We don’t think it’s happening.”