**United States:** Mattel has announced price increases on select toys in response to US tariffs on Chinese imports, while withdrawing annual financial targets and overhauling its supply chain to reduce reliance on China to under 15% by 2026 amid mounting trade tensions.
Mattel, the well-known toy manufacturer responsible for iconic products like Barbie and Hot Wheels, has announced plans to increase prices on certain items sold in the United States. This decision arises in response to tariffs imposed by the Trump administration, which have escalated costs for the company. The U.S. market accounts for approximately half of Mattel’s global sales, and about 20% of its products are imported from China. In light of ongoing trade tensions, Mattel aims to reduce its reliance on Chinese imports to under 15% by 2026.
The company, which cited a challenging macroeconomic landscape, communicated that predicting consumer spending and sales performance for the remainder of the year, especially during the crucial holiday season, had become increasingly uncertain. Consequently, it has withdrawn its annual financial targets, indicating a shift in strategy necessitated by external pressures.
Mattel’s chief executive, Ynon Kreiz, emphasized the disruptions caused by the tariff situation. “There’s no question that tariffs are creating disruption in the industry. Many companies have stopped production and shipping to the U.S. as a result of tariffs from China,” he said. Kreiz also noted support for the Toy Association’s advocacy for eliminating tariffs on toys, underscoring the broader impacts of these policy changes on the toy industry.
In an effort to mitigate the costs associated with tariffs, Mattel is adapting its supply chain. The company is increasing production of its Uno card game in India to cater to the U.S. market and is looking to direct more of its Chinese goods to international customers. Other locations, such as Indonesia, Malaysia, and Thailand, are also sources for its products but have faced reciprocal tariffs by the Trump administration, although these tariffs have been temporarily paused.
Mattel anticipates incurring about $270 million in additional tariff-related costs this year, starting from the third quarter. However, the outgoing finance chief, Anthony DiSilvestro, expressed confidence that the company’s measures would fully offset these expenses. Zak Stambor, a senior analyst at eMarketer, noted, “The toymaker is squarely in the crosshairs of Trump’s tariff war,” highlighting the intense scrutiny Mattel faces amid these economic challenges.
In a separate statement, Ford has also indicated that the tariffs would lead to significant costs for the automotive industry, estimating a $1.5 billion hit this year alone. Overall, tariffs are projected to add $2.5 billion to Ford’s costs, primarily due to increased expenses from imports, though the company plans to reduce these costs by approximately $1 billion through various strategies.
The ongoing trade conflicts between the U.S. and China continue to reshape global supply chains and economic strategies for businesses operating in various sectors.
Source: Noah Wire Services
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