Michelle ThompsonMattel, the company behind Barbie, announced it would raise prices on some of its toys in the US due to increased costs from President Trump’s tariffs. The company also plans to reduce its production of goods in China for the American market. Similarly, Ford, the car manufacturing giant, estimates that the tariffs will cost it around $1.5bn (£1.13bn) this year.
Both companies are among a growing number of major businesses warning about the effects of US tariffs on their operations and the broader economy. Mattel expressed difficulty in predicting consumer spending due to the unpredictable macroeconomic situation and the changing tariff policies. The US market represents about half of Mattel’s toy sales, with around 20% of these products imported from China. The company aims to lower its Chinese imports to under 15% by next year.
Since taking office in January, President Trump has introduced new tariffs, with some goods from China now facing import taxes as high as 145%. Last month, the administration warned that some Chinese goods could face tariffs up to 245% when combined with existing taxes. In response, China has imposed a 125% tax on US products.
Mattel also imports products from countries such as Indonesia, Malaysia, and Thailand, which were hit with high tariffs by Trump in April, although those measures were paused for 90 days. Trump recently acknowledged that tariffs might reduce consumer options, saying that American children might have fewer dolls, but emphasized that China would bear a larger burden.
Ford, on the other hand, anticipates that tariffs will increase its costs by $2.5bn this year, primarily due to higher costs of Mexican and Chinese imports. However, Ford has managed to cut around $1bn of those costs by taking actions like rerouting vehicles from Mexico to Canada to avoid US tariffs. The company also suspended its earnings forecast due to the uncertainty surrounding trade policies.
In April, companies such as Intel, Adidas, Skechers, and Procter & Gamble also reported the financial effects of tariffs. Intel’s CFO, David Zinsner, noted that the unpredictable trade policies have raised the likelihood of an economic slowdown and a potential recession. Adidas warned that US prices for popular shoes, like the Gazelle and Samba, would rise due to tariffs. Skechers’ CFO, David Weinberg, explained that the current situation made it difficult to predict results with confidence. Procter & Gamble, which manufactures brands like Ariel, Head & Shoulders, and Gillette, stated that it was considering price hikes to offset the higher costs of materials imported from China and other countries.
