On May 12, 2025, shares of major toy makers, including Mattel, rallied significantly after the U.S. agreed to temporarily reduce tariffs on China. The agreement pauses most tariffs and other trade barriers for 90 days, reducing the 145% levy President Donald Trump had in place on Chinese imports to 30%.
Mattel's shares jumped more than 10% following the announcement. This reduction in tariffs is a substantial positive development for the toy industry, which is heavily reliant on supply chains in China, with Bank of America estimating Mattel sources about 40% of its U.S. product from the region.
The temporary tariff reduction alleviates a significant cost burden and reduces the uncertainty that had led Mattel to retract its full-year guidance earlier in the month. This policy shift is expected to positively impact Mattel's cost structure and market sentiment, providing a more favorable operating environment.
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