Mattel, the legendary toymaker known for their classic Barbie dolls has just dropped a massive bombshell. Now, the company is reorienting its entire production strategy, including moving much of its production out of China. The company seemed to be getting ready for already-anticipated price increases across its product line. This ruling takes into account the concerns shared across industries and sectors regarding tariff impacts and increased costs.
In addition to Mattel’s move, Microsoft has raised the recommended retail prices for its Xbox video game consoles and certain controllers, signaling a trend among major companies to adjust pricing strategies in response to the evolving economic environment. Ford has recently raised alarm bells among consumers by alerting them to impending price hikes on its most popular models. This shows the far-reaching effects of a shift in tariff policy.
John David Rainey, Mattel’s Chief Financial Officer and spokesperson, reiterated the company’s focus on cost control measures. He stated that they will “try to work with suppliers to keep prices as low as we can.” He acknowledged the challenges posed by recent price increases, noting, “We have not seen price increases at this magnitude, in the speed in which they’re coming at us before, and so it makes for a challenging environment.”
Given the ever-evolving tariff landscape, that’s encouraging. Until now, there has been a 90-day reprieve that reduces duties on some Chinese imports to just 30%. Products from many other countries still face a 10% tariff. As companies learn how to navigate this new world, some of the largest U.S. retailers stand poised to collaborate and share what they’re learning. Target, Home Depot and Lowe’s will announce soon just how these tariffs will affect their pricing plans.
Against that backdrop, and perhaps in response to some of those efforts, President Donald Trump got involved. He chided Walmart when they tried to blame tariffs for price increases. He had encouraged the retailer to “EAT THE TARIFFS” and not raise prices for consumers to cover those added costs. Trump argued that Walmart and China should eat these costs rather than pass them on to consumers.
As consumers demand more bang for their buck, businesses are under greater pressure to drive down prices. Rainey underscored this consumer sentiment, noting that in a difficult market, continuing to offer lower prices is key to winning consumers over.