Mattel is considering raising prices for U.S. toy shoppers due to tariffs imposed by President Donald Trump, who recently suggested that children don’t need numerous toys. CEO Ynon Kreiz emphasized the significance of toys in children’s lives but acknowledged that tariffs could necessitate pricing adjustments, stating, “Where necessary, we will be taking pricing action in the U.S.” Despite aiming to maintain 40% to 50% of products priced at $20 or less, the company is facing a volatile economic environment influenced by changing trade policies.
Analysts from Mintel cautioned that consumers are very price-sensitive regarding toys, as many families are already grappling with rising costs in essential goods. Since Trump’s announcement of global tariffs, Mattel’s stock has dropped over 18% and the company refrained from providing a financial outlook for the year.
The toy industry is particularly vulnerable, with nearly 80% of U.S. toys imported from China, which puts pressure on pricing. Trump downplayed concerns about product shortages and suggested that fewer toys might suffice for children, which raises questions about consumer reactions to potential price hikes.
Mattel plans to enhance its global production strategy, aiming to diversify its manufacturing bases and reduce reliance on China from roughly 20% to 10% by 2027. Kreiz indicated that while returning production to the U.S. aligns with Trump’s goals, it isn’t a feasible option for Mattel at present. The company is also exploring direct imports to ensure product availability amid inventory reductions by retailers.
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