Trump Threatens SoCal Company With 100% Tariff

EL SEGUNDO, CA — President Donald Trump threatened Mattel with 100% tariffs on Thursday, after the South Bay company warned it would raise prices on some of its products as a result of the president's global trade war.

As Trump uses tariffs against China in a bid to drive manufacturing back to the United States — toys have emerged as a political flashpoint. The toy industry, which largely manufactures overseas, has warned that the trade war could drive up the price of toys while also hurting sales. The U.S. currently has a 145% tariff on Chinese goods.

The effort to bring toy manufacturing back to U.S. soil is something Mattel's CEO doesn't see panning out.

Mattel's CEO, Ynon Kreiz, said in an interview with CNBC on Tuesday that although the El Segundo-based company had a productive first quarter, Trump's plan to price out companies manufacturing their products in other countries will hurt both companies and consumers.

"Look, 80% of toy production globally happens in China," Kreiz said. "Many companies are exposed. If this continues, there will be significant disruption in the industry."

Trump responded by threatening to tariff the American company, which famously produces toys such as Barbie, Hot Wheels and Fisher-Price.

“That’s ok. Let him go, and we’ll put a 100 percent tariff on his toy, and he won’t sell one toy in the United States, and that’s their biggest market,” Trump said.

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Trump made toys front and center in the trade war last week when he cited dolls as an example of the sacrifices Americans may need to make to win the trade war.

"I don't think that a beautiful baby girl needs—that's 11 years old—needs to have 30 dolls," Trump told "Meet The Press." "I think they can have three dolls or four dolls because what we were doing with China was just unbelievable. We had a trade deficit of hundreds of billions of dollars with China."

Kreiz said Mattel has already been working over the last seven years to reduce its reliance on other countries' supply chain.

China now represents less than 25% of the company's global production, Kreiz told CNBC. The plan is to bring that down to less than 15% next year and less than 10% in 2027, Kreiz said.

Although Mattel is moving away from producing its toys in countries such as China, outsourcing toy production allows the company to create "quality products at an affordable price point." Kreiz also expressed support for The Toy Association's stance on zero tariffs on toys so that they remain accessible to everyone.

"This is something that we are committed to doing, to continue to create quality product and find the right balance of price and value, all in the service of the consumer," Kreiz said. "We need to remember that a significant part of toy creation happens in America. Design, development, product engineering, brand management all happens in America."

But during a briefing on Thursday, Trump disparaged Kreiz's comments, saying it was simply an attempt by the company to negotiate a deal with him.

"If Mattel, I'm not sure they also said, they're the only country I've heard they said, 'Well, we're going to go counter, we're going to go some place else,'" Trump said, mistakenly referring to the company as a country before threatening it with a 100 percent tariff.

Trump went on to emphasize that "tariffs are the most misunderstood thing, in any form of business, anywhere in business."

Though he acknowledged that the price of dolls may go up, Trump claimed that countries and companies pay the tariffs, not the consumer.

While countries and companies do pay the tariffs, consumers are likely to face higher prices to offset those costs.

The toy industry has been struggling to respond to the president and his trade war.

“The Toy Association is aggressively advocating for a tariff exemption for toys and your input helps us make the strongest case possible,” Kathrin Belliveau, chief policy officer at The Toy Association, wrote to toy company leaders. “With tariffs of this magnitude on the table, it is more important than ever for us to understand how your business will be affected.”

Mattel isn't the only toy company sounding the alarm on tariffs.

Hasbro, MGA Entertainment and Funko, have warned about prices and supply chain disruptions, NPR reported.

Jay Foreman, CEO of Basic Fun!, which makes Care Bears, Tonka Trucks and Lincoln Logs, told NPR's "Morning Edition" that tariffs could hurt workers even more than consumers.

"Parents will always find something for their child, even if they have to make it, "Foreman told NPR. "But how about all the moms and dads who work for those companies, or those are their companies, will they have a Christmas because they might not have a business, they might not have a job."