Toy Companies Brace For An Uncertain Holiday Season As China Tariffs Loom

During the 2024 campaign, then candidate Donald Trump made tariffs — taxes imposed on goods imported from another country — a cornerstone of his campaign. “The word ‘tariff,’ when properly used, is a beautiful word,” he said in September of last year. “One of the most beautiful words I’ve ever heard. It’s music to my ears.”

While experts and major retailers alike have warned proposed tariffs would result in higher prices and supply chain pitfalls, Trump remains undeterred in his commitment to a heavy-tariff policy, going so far as to implement a (currently paused) 145% tariff on Chinese goods. And given the fact that approximately 80% of toys sold in America are made in China, retailers are bracing for a challenging — and more expensive — holiday season.

Companies prepare for the holiday season months in advance, with Wired reporting that April is typically when retailers finalize their orders for fully-stocked shelves come December. But with the uncertainty of what these goods will ultimately cost, many have stayed their hand, which could have consequences for shoppers.

“We have a frozen supply chain that is putting Christmas at risk,” Greg Ahearn, chief executive of the Toy Association, told The New York Times. “If we don’t start production soon, there’s a high probability of a toy shortage this holiday season.”

Trump says his ultimate aim for tariffs is to bring manufacturing jobs back to the U.S. But even if that goal were to prove an economic win for the country (which is debated by experts), building a manufacturing infrastructure takes time. As such, companies will still have to produce their goods overseas, leading to an increased cost of business which, in turn, is passed on to consumers, at least until domestic production could go into effect.

In March, the Toy Association joined an international cadre of toy industry leaders to exempt toys from such tariffs. “Toys are essential products for childhood development and early education, and our industry works tirelessly to ensure these products remain safe and accessible," said Kathrin Belliveau, the organization’s chief policy officer. “Working with toy associations around the world, we are reaffirming our aspiration for toys to remain tariff-free globally.”

When asked about the issue, Trump seemed unconcerned, classifying such items as being largely unnecessary. “Well, maybe the children will have two dolls instead of thirty,” he told reporters. “Maybe the two dolls will cost a couple of bucks more.”

At the moment, tariffs on Chinese-made goods are paused until mid-July. Given the volatility of Trump’s first 100 days in office — which has been marked by legal challenges and ongoing negotiations of assorted executive orders and policies — it is unclear whether they will go into effect, and if so, if the ultimate rate will indeed be 145%. But as uncertainty looms and usual deadlines for the orders of toys and holiday decor are missed, manufacturers, retailers, and shoppers alike may find themselves approaching the holidays somewhat differently.