Less than a week ago, President Trump suggested that children may have to make do with fewer toys this year.
“Well, maybe the children will have two dolls instead of 30 dolls, you know?” He said those two dolls may “cost a couple of bucks more than they would normally.”
On Monday, Mattel, the U.S. toy company and maker of Barbies, said it would raise prices on U.S. toys because of Mr. Trump’s 145 percent tariffs on imports from China. Mattel, which produces 20 percent of its U.S.-sold goods there, said in its first-quarter earnings presentation that it aims to reduce that to less than 15 percent by 2026. It also said it would suspend its financial guidance for the year, citing uncertainty over trade and tariff policies.
Factories in China produce nearly 80 percent of all toys sold in the United States. Several U.S. toy companies have said they would likely raise prices because of the tariffs.
The Toy Association, a U.S. industry group representing 850 toy manufacturers, warned shortages were likely before Christmas. Its survey of 410 small businesses that make toys found that a majority said they had canceled orders, and about half said they risked going out of business within weeks or months if the tariffs remained in place.
Mattel is one of numerous companies that suspended financial forecasts for this year, including General Motors, Snap and UPS, because of Mr. Trump’s economic policies. Mattel said that given the “volatile macroeconomic environment and evolving U.S. tariff situation, it was too difficult to predict consumer spending and U.S. sales for the year.”
Zach Warring, an analyst at CFRA Research, said that Mattel could insulate itself from tariffs by selling more of its Chinese-made goods outside the United States. Mattel can also protect its margins by raising prices, but he questioned whether U.S. customers would be willing to pay more, or if toys would instead sit on shelves and ultimately need to be discounted.
