President Donald Trump threatened to impose 100 percent tariffs on the Mattel toy manufacturer after the company said it would diversify its production to other countries, but not to the United States.
Sitting at the Oval office on Thursday, Trump indicated that he was not afraid to punish Mattel, Barbie’s creator, Hot Wheels, one, American Girl and more, for refusing to transfer his production to the United States, the ultimate goal of Trump’s tariffs.
It was in response to Ynon Kreiz, president and executive director of Mattel, who told CNBC on Tuesday that it was unlikely that the company moved production to the United States, as a result of tariffs; preferring instead diversifying production to other countries or simply increasing prices for US consumers.
He said that even with tariffs, costs are too high in the United States to produce affordable toys even for the US consumer.
“It’s fine. Let it go, and we will apply a 100 percent tariff to its toy, and will not sell a toy in the United States, which is its largest market, Trump said.
Kreiz said that a “significant part” of the creation of toys occurs in the United States, such as design, development, product engineering and brand management, but that producing toys abroad allows them to create a “quality” and “affordable” product.
Approximately 20 percent of Mattel toys imports to the United States come from China.
Kreiz said the company expects to reduce that figure to 15 percent next year and eventually to 10 percent or less in 2027. This year, Mattel is relocating the production of 500 of his toys from China to other places, such as India.
-When asked if the tariffs of 145 percent of Trump to China, or other reciprocal tariffs, would inspire Mattel to transfer his production of toys to the United States, Kreiz reiterated: “We do not believe that happens.”
The company said it is determined to maintain between 40 and 50 percent of its products with a price of 20 dollars or less, but it is possible to increase some prices in the United States.
Trump dismissed that statement and said the tariffs were “the most misunderstood … in any type of business.”
“Often, the country collects them, often the company picks them up, people do not pick them up,” Trump said in the Oval office on Thursday.
Global economists agree that tariffs do affect consumers because companies increase prices to compensate for additional taxes on imported goods that cannot absorb.
Last week, Trump acknowledged that their tariffs could result in higher prices or an inventory reduction, saying: “Well, perhaps children have two dolls instead of 30”. He also suggested that these two dolls could “cost a couple more than normal.”
But it has remained firm that tariffs will ultimately help the US economy by increasing internal production, an affirmation to which economists are skeptical.
The president said he believes that Mattel is threatening to transfer production to another place in addition to the United States to negotiate an agreement with him.
