Mattel, the iconic American toy company behind Barbie and Hot Wheels, is planning to raise prices on U.S.-sold toys following a new round of tariffs imposed on Chinese imports. The move highlights growing pressure on consumer goods companies as President Trump’s aggressive trade policies begin to take a tangible toll on U.S. households.
The tariffs in question—set at a staggering 145%—target a wide array of products manufactured in China, a country that remains the backbone of the global toy supply chain. According to industry estimates, approximately 80% of toys sold in the United States are made in Chinese factories. For Mattel specifically, around 20% of its U.S. inventory is currently produced in China, a figure the company aims to reduce to below 15% by 2026.
Mattel announced the price increases during its Q1 earnings presentation, while also suspending financial guidance for the remainder of the year. The company cited an unpredictable macroeconomic environment and trade uncertainty as key reasons for the lack of forward-looking projections. It joins a growing list of major U.S. corporations—including General Motors, UPS, and Snap—that have hit pause on forecasting amid volatile policy shifts.
The impact of the tariffs is not confined to the industry giants. A survey by the Toy Association, which represents over 850 U.S.-based toy makers, revealed that more than half of small toy businesses are facing severe financial risk due to the tariffs. Among the 410 respondents, a majority reported canceling orders altogether, while roughly 50% warned that they could go out of business within months if the current trade regime persists. Shortages are already being predicted ahead of the holiday season.
While some analysts believe companies like Mattel could mitigate the damage by shifting distribution of Chinese-made products toward non-U.S. markets, the long-term impact on domestic sales remains uncertain. The company may recover its margins by raising retail prices, but whether American consumers will tolerate paying more at the checkout is another matter. If demand falters, shelves could remain stocked deep into the season, forcing markdowns and eating into profits.
With inflation already affecting discretionary spending, higher toy prices risk becoming yet another stress point for American families. As the trade war’s ripple effects continue, even the most cheerful pink packaging cannot distract from the growing economic cost.