Days after President Donald Trump attempted to downplay rising prices by saying American children should make do with fewer possessions, one of the nation's largest toy manufacturers is warning of increased consumer costs.
Mattel, the iconic maker of Barbie, said in its first quarter earnings report this week it plans to raise prices on American toys in direct response to the administration's new trade policies.
"The company is operating in an uncertain macro-economic environment with significant volatility, including changes in global trade policy and U.S. tariffs," the Monday, May 5 report said.
Along with Barbie, Mattel's most recognizable franchise brands include Hot Wheels, Fisher-Price, American Girl, Thomas & Friends, Uno, Masters of the Universe, Matchbox, Monster High, Mega and Polly Pocket. Though an international brand, roughly half of Mattel's business is in the United States, according to Chief Financial Officer Anthony DiSilvestro.
Though tariffs did not affect Mattel's first quarter earnings, the company said it is taking "mitigating actions" to offset potential impact of new tariffs. Along with price hikes, the toy giant says it plans to diversify its supply chain and take steps to further reduce its reliance on products from China. The company said in its May 5 earnings presentation that the evolving U.S. tariffs and volatile macroeconomic environment makes it difficult to predict sales for the rest of the year.
DiSilvestro said in a March 13 conference that less than 40% of the company's total production this year is expected to come from China.
The report did not include details about which Mattel products may end up more expensive in the coming months, but did project 40% to 50% of their products will cost $20 or less.
The Trump administration has imposed tariffs totaling 145% on imports from China. Ten percent baseline tariffs on most other countries remain in effect, even though Trump delayed steeper reciprocal tariffs for 90 days, in addition to 25% tariffs on foreign automobiles, steel and aluminum.
Trump, during an interview with NBC's "Meet the Press" that aired May 4, repeated the scenario of pricier dolls in his defense of tariff-induced price hikes, this time arguing little girls in the U.S. need to make do with fewer toys. The president has maintained that China will bear the brunt of his tariffs, yet in recent days has begun to openly acknowledge and downplay the real possibility of increased costs passed down to American shoppers.
"I don't think that a beautiful baby girl needs - that's 11 years old - needs to have 30 dolls," Trump told "Meet the Press" host Kristen Welker. "I think they can have three dolls or four dolls because what we were doing with China was just unbelievable. We had a trade deficit of hundreds of billions of dollars with China."
A week prior, Trump dismissed cost concerns in an interview with ABC, saying "the children will have two dolls instead of 30 dolls," and that "maybe the two dolls will cost a couple bucks more than they would normally."
Contributing: Joey Garrison, USA TODAY.
Kathryn Palmer is a trending news reporter for USA TODAY. You can reach her atkapalmer@usatoday.com and on X @KathrynPlmr.