Main information
- Mattel will increase the prices of its range of American toys due to customs duties.
- The company expects to lose around 270 million dollars this year due to customs duties of 145 percent on Chinese products.
- Mattel plans to diversify its supply chain outside of China and reduce its dependence on Chinese manufacturing, so that it represents less than 40 percent of world production by 2025.
Mattel, the famous toy manufacturer, originating from Barbie, announced its intention to increase the prices of its range of American toys due to the impact of customs duties.
Although the company has declared that customs duties had not yet affected its profits for the first quarter of the year, it provides for future losses and intends to mitigate them by diversifying its supply chain outside of China and by adjusting strategic price on the American market. This results in higher prices for consumers.
The prolonged trade war initiated by President Trump has a significant impact on the toy industry. With almost 80 percent of the toys sold in the United States made in China, customs duties of 145 percent on Chinese products are prejudicial. Mattel’s financial director said these customs duties would cost the company for around $ 270 million just for this year.
It seems that prices have already started to increase. A recent analysis of the prices of products has revealed a substantial increase in the price of a Barbie doll at Target, highlighting the impact of these customs duties on consumers.
Impact on industry and business reaction
Despite the expected price increases, the director general of Mattel, Ynon Kreiz, underlined the company’s commitment to make toys accessible to the greatest number of children and families as possible. He pleaded in favor of zero customs duties on toys on a global scale, arguing that it would promote better access to the game.
Mattel actively diversifies its production by obtaining supplies in seven different countries. The company aims to reduce its dependence on China and provides that Chinese manufacturing will represent less than 40 percent of its world toy production by 2025. Kreiz has also presented plans aimed at significantly reducing American imports from China in the years to come.
The relocation of the production of 500 China toys to other countries underlines Mattel’s proactive response to the tariff situation. Kreiz has recognized the disruptive nature of customs duties, noting that many companies have interrupted their production and expeditions to the United States accordingly. He expressed his support for the advocacy of the Toy Association in favor of zero customs duties on toys.
Mattel suspends his forecasts for 2025
The American market represents about half of the world’s world sales in Mattel, including around 20 percent of the products sold in the country are imported from China.
Mattel joins a growing list of companies that have suspended their forecasts for the year 2025 due to uncertainty surrounding consumption spending, especially during the crucial period of the end of year celebrations. This withdrawal of forecasts was welcomed with concern by investors and analysts.
On the other hand, Hasbro, another large toy manufacturer, who supplies in China for almost half of his toys and games sold in the United States, maintained his annual forecasts in April, supported by the good performances of his game segment.
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