The Club PUBlication 05/05/2025

Retailers fear toy shortages for Christmas
By DAISUKE WAKABAYASHI The New York Times

SEOUL - President Donald Trump's China tariffs are threatening Christmas.

Toy makers, children's shops and specialty retailers are pausing orders for the winter holidays as the import taxes cascade through supply chains.

Factories in China produce nearly 80% of all toys and 90% of Christmas goods sold in the United States.  The production of toys, Christmas trees and decorations is usually in full swing by now.  It takes four to five months to manufacture, package and ship products to the United States.

Trump's 145% tariffs have caused a drastic markup in costs for American companies.

Most of the entrepreneurs who have shared their plans with the New York Times have not yet canceled their orders. They hope the president will back away from the tariff brinkmanship.

But the alarm in the industry is palpable, with companies predicting product shortages and higher prices. Some business owners, citing how crucial holiday sales are to their bottom lines, are consulting bankruptcy lawyers.

"We have a frozen supply chain that is putting Christmas at risk," said Greg Ahearn, CEO of the Toy Association, a U.S. industry group representing 850 toy manufacturers. "If we don't start production soon, there's a high probability of a toy shortage this holiday season."

For America's Christmas industry, Chinese manufacturing is unmatched in its production speed and capability.

Toy makers overhaul large portions of their product lines every year to adapt to changing preferences . From materials to machinery, China's factories are one-stop shops for importers.

Kara Dyer, founder of Storytime Toys, usually places a big holiday order with her Chinese factory in the first two weeks of April to have enough inventory by mid-July. The Christmas holidays account for about twothirds of her annual revenue.

Dyer placed a small order of $30,000 worth of products before the latest tariffs, never expecting they would surge to such high levels. That shipment is en route to the United States.

When it arrives, she said, she expects to owe $45,000 in tariffs.
The shipment will provide the company with enough inventory for a few months, and she said she would probably raise prices at least 20% to cover the tariff costs. But she is waiting to make a big holiday purchase.
"I'm going to hold out hope for another two weeks that the tariffs will be removed and I'll be able to place the order," she said. "But if not, I will have to put my business on pause. I will definitely not place an order if the tariffs are in effect. It wouldn't make any sense."

In a Toy Association survey of 410 toy manufacturers with annual sales of less than $100 million, more than 60% said they had canceled orders, and about 50% said they would go out of business within weeks or months if the tariffs remained.

T rump has in recent days struck a conciliatory tone toward China and the tariffs, fueling some hope among business owners that he may exempt industries that do not pose a national security threat.
But even if Trump grants importers temporary relief, significant disruptions will occur as companies rush to fulfill orders.

Shipping costs are expected to surge, similar to the frenzy during the COVID pandemic, when a shortage of shipping containers led in some cases to a tenfold increase in freight prices.