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The latest iteration of the classic Barbie dolls, alongside the original versions, is currently on display at the Mattel Design Center located in El Segundo, California, marking a notable occasion in toy history.
In a recent earnings call, Mattel’s executives indicated that due to new tariffs instituted by President Donald Trump, the company may soon increase prices for popular products such as Barbie and Hot Wheels. Currently, approximately 40% of Mattel’s toy production occurs in China, with less than 10% sourced from Mexico. In light of the tariffs, the company is actively exploring ways to adjust its supply chain to lessen the financial impact while also contemplating potential price increases.
Financial Chief Anthony DiSilvestro articulated the company’s plans, mentioning a strategy that involves leveraging existing supply chains coupled with possible price adjustments. He emphasized that Mattel maintains close communication with retail partners to strike the right balance while prioritizing consumer interests in any pricing decisions.
The announcement comes on the heels of Trump’s recent instatement of a 10% tariff on goods imported from China, alongside a temporary halt on anticipated 25% tariffs on products coming from Mexico and Canada, which will remain paused for 30 days.
Experts across the political spectrum predict that such tariffs are likely to lead to increased prices for consumers. However, it remains uncertain whether Trump will follow through with tariffs on Mexico and Canada, as he has historically employed such threats as a part of his negotiation tactics.
Following the announcement of the 25% tariffs, Canada and Mexico responded by enhancing their border security measures, which has led to the temporary suspension of these duties. Before the announcement, both nations were already in the process of increasing security at their borders.
As for the U.S.-China trade relationship, a formal agreement to avert tariffs is still pending. If the 10% duty continues, its consequences will be felt acutely within the toy industry, with about 80% of toys sourced from China.
While Mattel has publicly stated its plans to utilize its supply chains and negotiate with suppliers to absorb some of the tariff impacts, insiders acknowledge the reluctance to absorb these costs, which could harm profit margins. If passing the full costs onto suppliers turns out to be unfeasible, companies may resort to raising consumer prices to recover the additional expenses.
Firms with diversified production strategies, like Mattel—which operates both proprietary and third-party factories across seven countries—are better poised to adjust their operations and work collaboratively with suppliers to minimize profit losses. Furthermore, around 40% of Mattel’s sales occur internationally, outside of North America, where tariffs are not so prominent.
Looking ahead, Mattel forecasts that by 2027, its sourcing from Mexico and China will constitute more than 25% of its overall global production, a reduction from its current rate of approximately 50%. At present, the company does not source any products from Canada.
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