More expensive Barbie, thinner Heinz – Trump’s tariffs redraw the global consumer market

Toys are getting more expensive: Barbie is also a victim

Mattel, one of the world’s best-known toy manufacturers, has announced that it will be forced to raise the prices of some of its products in the United States in response to President Donald Trump’s new tariffs. Citing the increase in costs, the company said it would reduce the proportion of toys made in China for the American market. While 20% of products sold in the United States were previously made in China, this could drop to less than 15% next year.

Mattel is looking for alternative production bases in Southeast Asia, such as Indonesia and Malaysia, but these countries would also be subject to high tariffs – which have now been suspended for 90 days. In a statement, Trump referred to the issue as the “baby issue,” adding: “American children would rather have two babies than thirty” – but he believes China could lose even more than that.

The auto industry is also in trouble: billions in losses have been reported

The trade tension is not only affecting the toy industry: the automaker Ford said that the tariffs have resulted in an additional cost of about $1.5 billion this year. According to the company, the total cost increase could reach $2.5 billion, mainly due to the increase in the cost of the Mexican and Chinese supply chains. Ford is trying to mitigate the impact by reorganizing production and building new trade routes – they expect to be able to cut the burden by up to $1 billion.

Modest expectations, declining consumption

The effects go far beyond the industry: due to inflationary pressure and more expensive imports, consumer consumption has also started to decline. Kraft Heinz CEO Carlos Abrams-Rivera said U.S. households are becoming more cautious about spending after Trump’s tariffs have raised inflation and slowed growth. The company lowered its full-year earnings guidance.

Several major U.S. companies have signaled this season that they are considering raising prices to offset the increased costs of raw materials and products from China and other Asian countries. Intel, Adidas, Skechers and Procter & Gamble have also cited the negative effects of the tariffs.