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The toy company Mattel may raise US prices to offset the cost of Donald Trump’s tariffs on goods made in Mexico and China, its chief executive has warned.
Ynon Kreiz told the Financial Times that less than 40 per cent of Mattel’s production was in China while Mexico accounted for less than 10 per cent. The US president has imposed an additional tariff of 10 per cent on Chinese goods and threatened tariffs of 25 per cent on imports from Mexico and Canada.
“We believe we are very well positioned to leverage the strength of our supply chain to mitigate for tariffs,” Kreiz said as Mattel released fourth-quarter and annual results on Tuesday. “And we are also considering potential pricing actions to mitigate for the tariffs.”
Business and consumer goods associations have urged the new administration to reconsider tariffs, which Trump has said are necessary to counter flows of drugs and migrants illegally entering the US.
But public companies have been reluctant to make concrete predictions over the effects of tariffs, as they struggle to keep up with rapid policy changes or seek to avoid antagonising Washington.
California-based Mattel is one of the world’s biggest toymakers with products including Barbie dolls, Hot Wheels cars and the Uno card game. About half of its global sales mix is in the US, Kreiz said.
The company on Tuesday reported net sales of $1.6bn in the fourth quarter, up 2 per cent year on year and slightly more than a consensus estimate compiled by Visible Alpha. Net income fell 4 per cent in the quarter to $141mn, more that twice the profit forecast.
Mattel shares rose by 9.5 per cent in after-hours trading.
“Looking into 2025, we plan to grow both top and bottom line and this includes the tariffs that have just been announced,” Kreiz said.
Mattel’s products are made in seven countries including China, Indonesia, Malaysia, Mexico and Thailand. Kreiz said the company’s share of production from China was less than half the industry average.
The new tariff on China went into effect on Tuesday. Trump agreed on Monday to pause the tariffs on Mexico and Canada for 30 days following calls with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau.
In 2018, Mattel began to diversify its supply sources. By 2027, no one country will represent more than 25 per cent of its global manufacturing footprint, Kreiz said.
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