Mattel increases prices of toys due to import duties

Published: 2025-05-06 20:01:10 ET MAT

Published on 05/06/2025 at 20:01

Key takeaways

Mattel, the well-known toy manufacturer behind Barbie, has announced plans to raise prices on its U.S. toy line due to the impact of import duties.

Although the company reported that the tariffs had not yet impacted profits for the first quarter of this year, it expects future losses and plans to mitigate them by diversifying its supply chain away from China and through strategic price adjustments in the U.S. market. This translates into higher prices for consumers.

The ongoing trade war unleashed by President Trump is having a major impact on the toy industry. With nearly 80 percent of toys sold in the United States manufactured in China, the 145 percent tariffs on Chinese goods are proving detrimental. Mattel's Chief Financial Officer estimated that these tariffs would cost the company about $270 million this year alone.

There are indications that prices are already starting to rise. A recent price analysis of products revealed a significant price increase on a Barbie doll at Target, further underscoring the impact of these tariffs on consumers.

Industry impact and company response

Despite the expected price increases, Mattel Chief Executive Ynon Kreiz emphasized that the company wants to make toys accessible to as many children and families as possible. He called for zero tariffs on toys worldwide, arguing that this would promote greater access to play.

Mattel is actively diversifying its production by sourcing products from seven different countries. The company wants to become less dependent on China and expects Chinese production to account for less than 40 percent of global toy production by 2025. Kreiz also outlined plans to significantly reduce U.S. imports from China in the coming years.

The relocation of 500 toys production from China to other countries highlights Mattel's proactive response to the tariff situation. Kreiz acknowledged the disruptive nature of the tariffs and noted that many companies have stopped production and shipping to the U.S. as a result. He expressed support for the Toy Association's plea for zero tariffs on toys.

Mattel suspends expectations for 2025

The U.S. market accounts for about half of Mattel's global toy sales, with about 20 percent of goods sold in the country imported from China.

Mattel joins a growing list of companies that have suspended their full-year 2025 expectations because of uncertainty about consumer spending, especially during the crucial holiday season. Investors and analysts are concerned about the withdrawal of expectations.

In contrast, Hasbro, another major toy manufacturer that sources roughly half of its toys and games sold in the U.S. from China, maintained its full-year projections in April, thanks to strong performance in its gaming segment.

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