Jody Serrano
Editor in chiefEditor in Chief at Xataka On. Before joining Webedia, I was a tech reporter at Gizmodo and The Messenger. While I've covered all sorts of things related to technology, I'm specialized in writing about social media, Internet culture, Twitch, and streamers.
It may be months away, but companies in the U.S. are already thinking about Christmas. And with President Donald Trump’s trade war, it doesn’t look good.
This week, it became evident that Trump might soon have to add another title to his resume: the Grinch.
Mattel says it will raise prices. On Monday, U.S. toymaker Mattel said it would raise prices on its products because of Trump’s 145% tariffs on Chinese imports. When presenting its first quarter financial results, the company explained that it was operating in an “uncertain macro-economic environment with significant volatility.” It specifically cited “changes in global trade policy” and tariffs.”
While the tariffs did not affect Mattel’s first quarter results, the company said it was prepared to take “pricing action in its U.S. business” where necessary.
Mattel manufactures 20% of the products it sells in the U.S. in China. With a 145% tariff, it would mean that the price of a $20 toy, for example, would jump to $40. The company has said that it expects to keep between 40-50% of its products under $20, CNBC reported.
A presidential warning. News about Mattel’s plans likely didn’t come as a surprise to Trump, who warned in a cabinet meeting last week that children may have less toys this year.
“Maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more than they would normally,” Trump said.
This isn’t the first time Trump has acknowledged but then tried to downplay the effects of his tariff policy. Earlier this year, the president said that his tariffs could cause “a little pain” in the short term, which he argued was understandable.
80%. That’s how many U.S. toys are manufactured in China, according to the Toy Association, an industry group that represents 850 toy manufacturers. The group is advocating for a 0% tariff on toys. Mattel may be making headlines today, but it’s far from the only company affected.
According to The New York Times, several U.S. toy companies have said that they would likely increase prices because of the tariffs. The Toy Association stated that its survey of small businesses found that many had cancelled toy orders in recent weeks and were in danger of going out of business under the current tariff policies.
A return to the U.S.? Not likely. While Trump has insisted that his tariffs would help grow the manufacturing industry in the U.S., any future growth won’t include Mattel.
Ynon Kreiz, Mattel’s CEO, said on Tuesday that the toy company’s production would not move to the U.S. He pointed out that even with the president’s tariffs, it was still cheaper to make toys in China.
“We believe that production in other countries where we can be efficient and more productive is the best balance between manufacturing outside of the (United States) and continue to develop product in term of design and creativity in America,” Kriez said.
Images | Roman Vsugon | Jiawei Zhao
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