Camilla Jessen
What started as a trade fight over real cars has now rolled into the toy aisle.
The United States’ widening tariff crackdown on imports is no longer limited to full-size vehicles.
Now, even toy cars are feeling the heat.
Mattel, the maker of the iconic Hot Wheels brand, is reportedly evaluating whether to shift parts of its global manufacturing network in response to new U.S. tariffs.
The company fears its toy cars could be caught up in the same trade penalties that are making it harder to import actual automobiles.
Trump Threatens 100% Tariff on Mattel Toys
President Donald Trump, responding to the reports, issued a warning last Friday from the White House, threatening to impose a 100 percent tariff on Mattel toys if the company moves production to countries other than the U.S.
Let them go, and we’ll put a 100 percent tariff on his toys, and he won’t sell a single toy in the United States, and that’s their biggest market.
Trump’s remarks came shortly after Mattel CEO Ynon Kreiz gave an interview to CNBC, in which he said moving production to the United States was unlikely.
Instead, the company is looking to diversify its production base away from China to avoid the 145 percent tariffs currently imposed on Chinese imports.
Mattel’s Global Production Strategy
Hot Wheels toys are mostly produced in Malaysia, with additional manufacturing in Indonesia, Thailand, and China.
At present, 20 percent of Mattel’s toy production still comes from China.
Kreiz says the company is aiming to reduce that figure to 15 percent by 2025, and down to 10 percent by 2027.
Kreiz acknowledged the potential impact on U.S. consumers, suggesting that price hikes may be necessary to absorb tariff-related costs.
“Design, development, product engineering, brand management all happen in the U.S.,” Kreiz told CNBC. “Making the product, producing it in other countries, allows us to create quality products at affordable prices.”
Despite this, he maintained that 40 to 50 percent of Mattel’s products are expected to remain priced under $20, even with possible adjustments.
Trump Downplays Consumer Impact
Trump, however, pushed back on the idea that consumers would be affected by tariffs.
Often it’s the country that pays the extra cost, often it’s the company that pays—consumers don’t pay more.
That claim has been widely disputed.
Several carmakers have already announced price increases on new vehicles due to higher import duties.
In some cases, those price hikes are already hitting U.S. showrooms.
For example, Ferrari confirmed that prices for American buyers rose immediately after the latest round of tariffs took effect.
Amid the escalating trade tension, there may be a brief reprieve.
On Monday, AFP reported that the U.S. and China have agreed to a 90-day pause in their ongoing tariff battle.