The companys CEO doesnt foresee making toys in the US
of ConsumerAffairsMay 7, 2025
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Mattel is accelerating its efforts to reduce reliance on Chinese manufacturing due to steep U.S. tariffs, aiming to decrease imports from China.
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The company plans to raise prices on some toys in the U.S. where necessary, as tariffs could increase costs by an estimated $270 million this year.
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CEO Ynon Kreiz emphasized that tariffs on toys could limit children’s access to affordable play.
President Trump made some headlines last week when, in answer to a question about toy prices rising due to tariffs, he said kids might get along with two dolls instead of 30. The CEO of Mattel suggests childrenwill in fact, probably face higher prices for toys.
In an interview with CNBC, Mattel CEO Ynon Kreiz discussed the significant impact of U.S. tariffs on the company’s operations and the broader toy industry. The tariffs, particularly the 145% levy on Chinese imports, have prompted Mattel to reassess its manufacturing and pricing strategies.
To mitigate the effects of the tariffs, Kreiz said the toymaker is intensifying efforts to diversify its supply chain away from China. Currently, under 40% of Mattel’s production is based in China, and the company plans to reduce this to below 15% by 2026 and under 10% by 2027. This move aims to minimize exposure to trade-related disruptions and ensure more stable operations.
While the tariffs are aimed at persuading U.S. companies to return manufacturing to the U.S., Kriez said that doesnt make economic sense for low cost items like toys.
We need to remember that a significant part of toy creation happens in America, Kriez said on the CNBC program Squawk Box. Design, development, product engineering, brand management all happens in America. Making product, producing product in other countries, allows us to create quality products at affordable price points.
Consumer impact
The tariffs are expected to increase Mattel’s costs by approximately $270 million this year. In response, the company plans to raise prices on certain toys in the U.S. where necessary.
Despite these adjustments, Kreiz said Mattel is committed to keeping 40% to 50% of its products priced at $20 or less to maintain affordability for consumers.
Kreiz emphasized the importance of keeping toys affordable, saying, “Toys are foundational to a child’s growth and development. Zero tariffs for toys give the greatest number of children and families access to play.” He expressed concern that increased costs could limit children’s access to toys, particularly during the holiday season.
Due to the uncertainty surrounding the evolving U.S. tariff landscape, Mattel has paused its full-year 2025 financial guidance. The company reported a net loss of $40 million in the first quarter, despite a 2% increase in net revenue to $827 million. Mattel’s stock has declined 14.1% over the past year, underperforming the broader market.
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