Less selection, higher prices: How tariffs are shaping the holiday
shopping season
[July 21, 2025] By
ANNE D'INNOCENZIO and MAE ANDERSON
NEW YORK (AP) — With summer in full swing in the United States, retail
executives are sweating a different season. It’s less than 22 weeks
before Christmas, a time when businesses that make and sell consumer
goods usually nail down their holiday orders and prices.
But President Donald Trump's vacillating trade policies, part of his
effort to revive the nation’s diminished manufacturing base and to
reduce the U.S. deficit in exported goods, have complicated those
end-of-year plans. Balsam Hill, which sells artificial trees and other
decorations online, expects to publish fewer and thinner holiday
catalogs because the featured products keep changing with the tariff —
import tax — rates the president sets, postpones and revises.
“The uncertainty has led us to spend all our time trying to rejigger
what we’re ordering, where we’re bringing it in, when it’s going to get
here,” Mac Harman, CEO of Balsam Hill parent company Balsam Brands,
said. “We don’t know which items we’re going to have to put in the
catalog or not."
Months of confusion over which foreign countries' products may become
more expensive to import has left a question mark over the holiday
shopping season. U.S. retailers often begin planning for the winter
holidays in January and typically finalize the bulk of their orders by
the end of June. The seesawing tariffs already have factored into their
calculations.
The consequences for consumers? Stores may not have the specific gift
items customers want come November and December. Some retail suppliers
and buyers scaled back their holiday lines rather than risking a hefty
tax bill or expensive imports going unsold. Businesses still are setting
prices but say shoppers can expect many things to cost more, though by
how much depends partly on whether Trump's latest round of “reciprocal”
tariffs kicks in next month.
The lack of clarity has been especially disruptive for the U.S. toy
industry, which sources nearly 80% of its products from China. American
toy makers usually ramp up production in April, a process delayed until
late May this year after the president put a 145% tariff on Chinese
goods, according to Greg Ahearn, president and CEO of the Toy
Association, an industry trade group.
The U.S. tariff rate may have dropped significantly from its spring high
— a truce in the U.S.-China trade war is set to expire on Aug. 12 — but
continues to shape the forthcoming holiday period. Manufacturing
activity is way down from a year ago for small- and medium-sized U.S.
toy companies, Ahearn said.
The late start to factory work in China means holiday toys are only now
arriving at U.S. warehouses, industry experts said. A big unknown is
whether tariffs will keep stores from replenishing supplies of any
breakout hit toys that emerge in September, said James Zahn,
editor-in-chief of the trade publication Toy Book.
In the retail world, planning for Christmas in July usually involves
mapping out seasonal marketing and promotion strategies. Dean Smith, who
co-owns independent toy stores JaZams in Princeton, New Jersey, and
Lahaska, Pennsylvania, said he recently spent an hour and a half running
through pricing scenarios with a Canadian distributor because the
wholesale cost of some products increased by 20%.
Increasing his own prices that much might turn off customers, Smith
said, so he explored ways to "maintain a reasonable margin without
raising prices beyond what consumers would accept.” He ordered a lower
cost Crazy Forts building set so he would have the toy on hand and left
out the kids' edition of the Anomia card game because he didn't think
customers would pay what he would have to charge.
“In the end, I had to eliminate half of the products that I normally
buy,” Smith said.
Hilary Key, owner of The Toy Chest in Nashville, Indiana, said she tries
to get new games and toys in early most years to see which ones she
should stock up on for the winter holidays. This year, she abandoned her
product testing for fear any delayed orders would incur high import
taxes.
[to top of second column] |
Hilary Key, owner of The Toy Chest, straightens merchandise on the
shelves of her toy store in Nashville, Ind., Thursday, June 26,
2025. (AP Photo/Michael Conroy)
 Meanwhile, vendors of toys made in
China and elsewhere bombarded Key with price increase notices. For
example, Schylling, which makes Needoh, Care Bear collectibles and
modern versions of nostalgic toys like My Little Pony, increased
prices on orders by 20%, according to Key.
All the price hikes are subject to change if the tariff situation
changes again. Key worries her store won’t have as compelling a
product assortment as she prides herself on carrying.
“My concern is not that I’ll have nothing, because I can bring in
more books. I can bring in more gifts, or I can bring in just things
that are manufactured in other places,” she said. “But that doesn’t
mean I’m going to have the best stock for every developmental age,
for every special need."
The retail industry may have to keep taking a whack-a-mole approach
to navigating the White House's latest tariff ultimatums and
temporary reprieves. Last week, the president again reset the rates
on imports from Brazil, the European Union, Mexico, and other major
trading partners but said they would not take effect until Aug. 1.
The brief pause should extend the window importers have to bring in
seasonal merchandise at the current baseline tariff of 10%. The Port
of Los Angeles had the busiest June in its 117-year history after
companies raced to secure holiday shipments, and July imports look
strong so far, according to Gene Seroka, the port's executive
director.
“In my view, we're seeing a peak season push right now to bring in
goods ahead of potentially higher tariffs later this summer," Seroka
said Monday.
The pace of port activity so far this year reflects a “tariff
whipsaw effect” — imports slowing when tariffs kick in and
rebounding when they're paused, he said. “For us consumers, lower
inventory levels, fewer selections and higher prices are likely as
we head into the holidays.”
Smith, who co-owns the two JaZams stores with his partner, Joanne
Farrugia, said they started placing holiday orders two months
earlier than usual for “certain items that we felt were essential
for us to have at particular pricing.” They doubled their warehouse
space to store the stockpile. But some shoppers are trying to get
ahead of higher prices just like businesses are, he said.
He's noticed customers snapping up items that will likely be popular
during the holidays, like Jellycat plush toys and large stuffed
unicorns and dogs. Any sales are welcome, but Smith and Farrugia are
wary of having to restock at a higher cost.
“We’re just trying to be as friendly as we can to the consumer and
still have a product portfolio or profile that is gonna meet the
needs of all of our various customers, which is getting more and
more challenging by the day,” Smith said.
Balsam Brands' Harman said he's had to resign himself to not having
as robust a selection of ornaments and frosted trees to sell as in
years' past. Soon, it will be too late to import meaningful
additions to his range of products.
“Our purpose as a company is to create joy together, and we’re going
to do our very best to do that this year," Harman said. “We’re just
not going to have a bunch of the items that consumers want this
year, and that’s not a position we want to be in."
All contents © copyright 2025 Associated Press. All rights reserved |
