During a recent appearance on CNBC’s “Squawk Box” on Tuesday, Mattel CEO Ynon Kreiz expressed skepticism about the possibility of Mattel relocating its manufacturing operations to the United States in response to President Trump’s tariffs on Chinese goods. Kreiz stated, “We don’t see that happening.” However, the company does anticipate rising prices in the US. In the interview, Kreiz outlined three key strategies that Mattel is implementing to mitigate the costs associated with Trump’s trade war, including “pricing action.”

This conversation took place just one day after Mattel withdrew its annual financial forecast. In its first-quarter earnings report, the company explained that the “volatile macroeconomic environment and evolving U.S. tariff landscape” made it challenging to predict consumer spending and Mattel’s US sales for the remainder of the year and the holiday season. Additionally, Mattel announced that it had increased its cost savings target for the year from $60 million to $80 million, which will be achieved in part by reducing promotions and discounts. The company also laid off over 100 employees from its El Segundo, CA, headquarters at the end of March as part of its cost-cutting efforts.

Regarding its tariff mitigation efforts, Kreiz noted that the company is focused on diversifying its global supply chain to reduce its reliance on China. According to Kreiz, within two years, no single country will account for more than 25% of Mattel’s sourcing.

Outside of China, Mattel also imports products, including Barbies, Hot Wheels, and American Girl Dolls, from countries such as Indonesia, Malaysia, and Thailand. These countries were recently targeted by reciprocal tariffs announced by the Trump administration in early April, which were subsequently paused for 90 days.

Kreiz’s “Squawk Box” appearance occurred less than a week after President Trump addressed the impact of tariffs on the toy industry, stating that “maybe the children will have two dolls instead of 30 dolls” and that “maybe the two dolls will cost a couple of bucks more than they would normally.” When asked if Christmas is at risk, Kreiz emphasized Mattel’s commitment to producing a steady supply of products at a “wide range of affordable price points.” According to Roth analyst Eric Handler, Mattel expects to keep between 40% and 50% of its products priced under $20.

The Toy Association, a trade group representing the US toy industry, has been advocating for an exemption from Trump’s tariffs. Kreiz expressed his support for the group’s efforts during the interview, noting that toys are “an essential part of children’s lives.”

Kreiz joined Mattel in 2018, having previously led Maker Studios, a content creation company acquired by Disney in 2016. He is credited with leading Mattel through a successful turnaround effort, which included the Barbie brand achieving its best full-year sales results in 2021 under his leadership.

Last week, President Trump stated that Americans may need to make sacrifices, such as having fewer dolls, due to the trade war. He insisted that this would be a worthwhile sacrifice, although the ultimate goal of the trade war remains unclear. The impact of the trade war on the upcoming holiday season, including Black Friday, is still to be determined.