Luxury British carmakers like Rolls-Royce, Range Rover and Aston Martin will be getting a tariff reprieve under the outlines of a trade agreement President Donald Trump announced Thursday while doubling down on his threats to continue tariffs on toys.
Shortly after announcing he would reduce the tariff on British cars to 10%, from 27.5%, Trump said he would keep steep tariffs on toymaker Mattel — even if the company moves its overseas production out of China, where it makes around 40% of its toys. Mattel CEO Ynon Kreiz said this week that the company was looking to shift more production out of China, but doesn’t see it moving to the U.S.
“That’s OK, let him go, and we’ll put a 100% tariff on his toys, and he won’t sell one toy in the United States, and that’s their biggest market,” Trump said in remarks from the Oval Office. “I heard that, I mean, I watched this guy talking about how I’m going to go counter. I said, ‘Well, I wouldn’t want to have him as an executive too long.’”
But in giving a tariff break to Rolls-Royce, Trump dismissed the idea that those vehicles could be made in the U.S. Other luxury cars made in the U.K., like Range Rovers, Land Rovers and Jaguars, will also be exempt from the 25% tariff Trump put earlier this year on all auto imports and charged a lower rate of 10%, even though those automakers ship thousands more vehicles to the U.S. than Rolls-Royce
“We took it from 25 to 10 on Rolls-Royce, because Rolls-Royce is not going to be built here. I wouldn’t even ask them to do that. It’s a very special car, and it’s a very limited number, too,” Trump said. “It’s not, you know, one of the monster car companies that makes millions of cars. They make a very small number of cars that are super luxury.”
Mattel’s Kreiz said the company has been shifting its production out of China for the past seven years and was looking to continue to diversify its supply chain in the coming months. Still, the maker of Barbie dolls and Hot Wheels cars told CNBC that “where necessary, we will be taking pricing action in the U.S.” and didn’t foresee being able to move manufacturing to the U.S.
“We believe that production in other countries, where we can be efficient and more productive, is the best balance between manufacturing outside of the U.S. and continuing to develop products in terms of design and creativity in America,” Kreiz said.
The United States imports from China as much as 75% of the toy products it sells, according to the Commerce Department, making it one of the industries most reliant on that country’s supply chain.
Trump has repeatedly dismissed the impact of price increases on children’s items produced in China, including toys and strollers, which are largely made there, though Treasury Secretary Scott Bessent said exemptions for baby products were “under consideration.”
Trump has put in place a 145% tariff on all Chinese imports, causing some companies to halt shipments to the U.S. from China or consider significant price increases.
“When you say strollers are going up, what kind of a thing? I’m saying that gasoline is going down. Gasoline is thousands of times more important than a stroller or something else,” Trump said in an interview Sunday on NBC’s “Meet the Press.”
“I don’t think that a beautiful baby girl needs — that’s 11 years old — needs to have 30 dolls. 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,” Trump said on “Meet the Press. “
“I’m saying they don’t need to have 30 dolls,” he added.
