President Donald Trump’s 145% tariffs against China are supposed to bring manufacturing back to America, or so he says. But let’s be real, the chances of that happening, especially when it comes to toys, are pretty slim. Mattel CEO Ynon Kreiz even said on CNBC’s “Squawk Box” that “We don’t see that happening,” just a day after the company had to pull out their annual financial targets.
Kreiz pointed out that a big chunk of toy creation actually takes place in America. Things like design, development, product engineering, and brand management all happen right here in the good ol’ U.S. of A. Producing toys in other countries, like China, allows companies like Mattel to make high-quality products at prices that won’t break the bank.
For almost ten years now, Mattel has been trying to spread out its manufacturing all over the world to reduce how much they rely on China. By the end of this year, less than 40% of their products will be coming from China. Kreiz also mentioned that in a couple of years, no single country will supply more than 25% of their products.
To offset the costs brought on by Trump’s trade war with China, Mattel is doing things like raising prices in the U.S. But they’re trying to keep the prices of their toys as low as possible. They’re aiming to keep around 40-50% of their products under $20, according to analyst Eric Handler.
“This is something we are committed to do,” Kreiz said. “To continue to create quality product and find the right balance of price and value all in the service of the consumer.” Since the tariffs were announced on April 2, Mattel’s stock has taken a bit of a hit, dropping about 19%.
So, it seems like Trump’s plan to bring manufacturing back to America isn’t really panning out, at least not when it comes to toys. Mattel is doing what they can to stay afloat in this trade war, but who knows how long they can keep it up. Not really sure why this matters, but it’s something to keep an eye on for sure.
In the meantime, the new and old versions of Barbie dolls are hanging out at the Mattel Design Center in El Segundo, California. Maybe it’s just me, but I feel like Barbie always finds a way to stay relevant, no matter what’s going on in the world.
Overall, it’s a tough time for companies like Mattel, trying to navigate through this trade war and keep their prices low for consumers. But hey, that’s business for you. You win some, you lose some. Let’s see how things play out in the end.
And that’s the scoop on Mattel and their struggle with Trump’s tariffs. Let’s hope they can weather the storm and come out on top in the end.
