Hot Wheels toys could become far more expensive if President Trump has his way. On Thursday, the President threatened to enact a 100-percent tariff on Mattel, Hot Wheels' parent company, after its CEO promised to diversify its production to other countries (but not the United States).
"Let them go and we'll put a 100-percent tariff on his toys, and he won't sell one toy in the United States, and that's their biggest market," Trump told reporters at the White House on Friday.
The statement comes in response to a CNBC interview held on Tuesday with Ynon Kreiz, Mattel's chairman and CEO. Kreiz said it's unlikely the company would shift production to the US, instead opting to diversify production to other parts of the world to avoid the 145-percent tariff on Chinese imports. He also suggested simply raising prices for buyers in America.
"We need to remember that a significant part of toy creation happens in America," Kreiz told CNBC. "Design, development, product engineering, brand management all happens in America. Making product, producing product in other countries, allows us to create quality products at affordable price points."
Mattel produces the majority of Hot Wheels toys in Malaysia, though the model cars are also produced in Indonesia, Thailand, and China. Right now, only 20 percent of Mattel's entire toy production comes from China. Kreiz says the company is planning to bring that number down to 15 percent by next year, and 10 percent by 2027.
Kreiz went on to tell CNBC that Mattel expects to keep 40 to 50 percent of its products under $20, but tariff-induced price hikes are likely.
Trump, in a rebuttal, brushed off the suggestion that prices could go up due to tariffs.
"Oftentimes, the country picks them up, oftentimes the company picks it up, the people don’t pick it up," Trump said on Thursday in the Oval Office.
As The Independent points out, global economists agree that tariffs impact consumers, as companies raise prices to offset the taxes on imported goods. It's the same story with real, actual cars, where analysts expect the average transaction price for a vehicle to rise by $3,600.
Mattel did not immediately respond when reached by Motor1 for comment on the President's statement. We'll be sure to update this article if we hear back.
