President Donald Trump has threatened to place a 100 percent tariff on Barbie maker Mattel, after the company’s CEO said it would continue to manufacture outside the U.S. but would be reducing its reliance on Chinese imports.

“I’ve heard [Mattel] said: ‘Well we’re going to go counter, we’re going to try going someplace else,'” Trump said in the Oval Office on Thursday. “That’s OK, let him go, and we’ll put a 100 percent tariff on his toys, and he won’t sell one toy in the United States, and that’s their biggest market.”

Newsweek has reached out to Mattel and the White House via email for comment outside of regular business hours.

Why It Matters

Trump’s threat comes as toys—in particular dolls—have emerged as a flashpoint in the ongoing debates over tariffs and trade policy.

Several representatives of the industry have warned that their reliance on Chinese imports will result in toys being hit hardest by the current 145-percent rate on the country, while lobbying the administration for a exemption to ensure sufficient stock and affordable prices come holiday season.

Trump and his cabinet, however, have downplayed the issue’s significance, with the president himself repeatedly stating that girls will be better off for having fewer dolls, and now threatening tariffs on the world’s most iconic doll manufacturer.

What To Know

Trump’s comments, made following the announcement of cars- and metals-focused deal with the U.K., came in response to a reporter’s question regarding Mattel’s recent decision to raise its prices as a result of the tariffs.

Earlier this week, Mattel said it would be taking “pricing action” in its U.S. business, pointing to the “changes in global trade policy and U.S. tariffs” in the announcement.

During the company’s first-quarter earnings call, Mattel CEO Ynon Kreiz said the tariff-driven price hike was one of the three “mitigating actions” the company had been forced to take in response to the tariffs, alongside a reduction in its dependence on China-sourced products and a broader diversification of its supply chain.

In an interview with CNBC on Tuesday, Kreiz was asked whether it would be cheaper to relocate some manufacturing to the U.S. due to the tariffs, but responded: “We don’t see that happening.”

“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 product in terms of design and creativity in America,” he said.

In response to the price increases, and similar announcements made by car manufacturer Ford this week, Trump said: “I think they’re saying that just to negotiate deals with me.”

Trump’s remark on Mattel “trying to go somewhere else,” and the resulting threat of a targeted, 100 percent tariff on its toys was somewhat ambiguous, given the company has only advocated shifting more of its manufacturing outside of China.

What People Are Saying

President Donald Trump, during an interview with Meet the Press on Sunday, said: “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.”

Mattel CEO Ynon Kreiz, speaking with CNBC this week, said: “80 percent of toy production globally happens in China. The Toy Association has stated that many companies are exposed to potential risks. If the current situation continues, there will be significant disruption in the industry. We support the Toy Association’s advocacy for zero tariffs on toys to ensure that safe and affordable products remain accessible to everyone.”

What Happens Next

Despite appeals from industry representatives, the administration has not announced an exemption for tariffs on toys or signaled its intention to grant one.