President Donald Trump’s tariffs are threatening to put a crimp in Christmas.
The United States imports as much as 75% of the toy products it sells from China, according to the U.S. Commerce Department, making it one of the industries most reliant on that country’s supply chain. Along with sports equipment and games, it is the fourth-largest import category from that nation.
As a result, toy industry officials are warning U.S. consumers to expect higher prices and fewer choices this year, including for the holidays, as a result of Trump’s tariffs.
“Christmas is in danger,” said Greg Ahearn, president and CEO of the Toy Association, the industry’s principal trade group. He said production in China continues to slow every time Trump ratchets up the tariffs on that country.
And it’s happening at an inopportune time. Traditionally, production starts to ramp up around this point of the year for goods to be ready for the fall and winter shopping season, he said.
As Trump revealed China would face some of the highest tariffs in his country-by-country “Liberation Day” rollout of the levies — and later said the duties on China would rise as high as 145% — shares in Hasbro and Mattel have tanked. While both firms had earlier incorporated a 20% tariff impact from China into their financial projections for 2025, they have not yet publicly discussed the impact of a 145% levy.
It’s one reason why the Toy Association is co-sponsoring this year’s White House Easter Egg Roll — part of a push to keep toys, which have traditionally avoided trade duties, free from Trump’s tariffs.
“The Administration maintains regular contact with business leaders, industry groups, and everyday Americans about our trade and economic policies. President Trump, however, has been clear: if you’re worried about tariffs, the solution is simple. Make your product in America,” White House spokesman Kush Desai said in a statement.
That’s not so easy, toy industry officials say. Chinese toy manufacturing expertise has been honed through decades of experience, and the U.S. industry’s supply chain has become dependent on molds, dyes, labor and safety techniques that are uniquely found there.
“This is skilled labor, and there’s no getting around that,” Ahearn said. “And they are significantly less expensive and more experienced than it ever can be in U.S., he added, referring to China’s toy supply chain.”
It would be virtually impossible to replicate the industry’s efficiencies in the U.S. in a reasonable time frame, he said.
Jonathan Silva, co-owner of the Massachusetts-based WS Game Company, said he fears he will have to lay off his 22 employees if the situation drags on. His firm designs high-end versions of classic games and 100% of their manufacturing occurs in China, he said.
“We’re at standstill,” Silva said. He estimates they have about four months of product runway built up,but after that it’s up in the air.
“We’re investigating every option we can, but right now our business is pretty much on hold,” he said.
Even firms that don’t rely on China say Trump’s tariffs are having a ripple effect. Beate Caso, head of Bruder Toys America, which manufactures its product in Germany, says that in addition to having to reckon with 10% tariffs there, the entire industry will face higher costs due to worldwide shipping container shortages as production in China for all products slows down.
“Prices will go up tremendously,” Caso said. “There will also be limited supply, and then you have to add tariff costs. So everything is just going to become more expensive, and consumers will definitely feel that.”
