US toymakers face billion-dollar tariff hike before Christmas

In April, President Donald Trump speculated that American children would be willing to own fewer toys as the price for his successful tariffs.

“Well, maybe the kids will have two dolls instead of 30 dolls, you know?” » the president said after a marathon cabinet meeting at the White House. “And maybe both dolls will cost a few dollars more than they normally would.”

It was not the end of the Trump administration that presaged tariff-fueled headaches for toymakers banking on robust sales. White House senior adviser Stephen Miller later said he believed Americans would be willing to pay more for higher-quality toys if they were made in the United States.

As Americans enter the December holiday season, reality is not setting in. Tariffs are now hitting the once-duty-free toy sector in the United States, pushing import taxes to levels not seen since the mid-20th century. Today, toy companies of all sizes are scrambling to reorganize their massive supply chains to avoid paying double-digit tariffs while battling the uncertainty unleashed within the U.S. economy.

“I think we’re probably back to the toy tariff rates of the 1940s,” Ed Gresser, director of trade and foreign markets at the Progressive Policy Institute, told Quartz. He observed that U.S. manufacturers have largely cut jobs over the past nine months and that there is little, if any, sign that U.S. toymakers are offshoring production.

Unlike other products like coffee and bananas for which tariffs have been lifted, toys do not benefit from an exclusion as was the case under the first Trump administration. China and Vietnam are the two largest exporters of toys to the United States, with the former accounting for 80% of all U.S. toy imports. In China, the toy industry is firmly established, in particular thanks to a fleet of factories capable of quickly mass producing toys at low labor costs.

Both countries have double-digit tariffs: for China, the United States has a 30% tariff rate, with a one-year pause in trade hostilities. In Vietnam, the rate is 20% following a chaotic preliminary trade agreement still being negotiated.

Estimates vary depending on the amount of customs duties levied on imported toys. Gresser calculated that $888 million in tariffs were imposed on toys and dolls between January and July 2025. We Pay the Tariffs, a small business advocacy group, estimates that $1.2 billion in tariffs hit the U.S. toy sector between the start of the year and August.

Regardless, the tariffs ended a three-decade period of duty-free for toys that traced its origins to a global trade deal known as the Uruguay Round of 1995, Gresser said.

“America is not here”

Retailers’ financial results have been shaken virtually across the board. Rates that have fluctuated through most of 2025 have affected companies’ decisions about shipping, hiring, and ultimately pricing.

In its latest quarterly report filed with federal regulators in October, toy giant Mattel acknowledged that tariffs were contributing to “substantial uncertainty” around its business.

It reported a slight decline in its turnover in the third quarter of 2025, down 6% compared to the third quarter of 2024 and below analysts’ expectations. The company announced in May that it was raising prices on its flagship products, including Barbie dolls, and also had to abandon its financial forecasts.

Financial difficulties are magnified among smaller toy store owners, who have less room to maneuver and thinner margins. Such is the case for Joann Cartiglia, owner of Queen’s Treasures, an antique doll store based in upstate New York. Their doll lines are exclusively made in China.

In an interview with Quartz, she described a difficult economic landscape, made even more volatile by the armada of customs tariffs. Cartiglia said she had to lay off four full-time employees this year and her store now employs only 2.5 workers total, including her (Cartiglia’s husband is a part-time volunteer).

Her doll sales are down 60% this month compared to last year, a trend she attributes to tariffs. When it comes to dolls, high tariffs forced Cartiglia to increase the price of stickers by 20 percent.

Cartiglia believes it’s simply impossible for domestic toy brands like his to become fully self-sufficient in the United States. It says its products are made by hand in batches of 500 to 1,500 at a time, and that there is no domestic workforce or physical infrastructure in the United States to support them.

“American brands are creating jobs that don’t exist. We’re creating jobs in marketing, distribution and customer service, all those areas where kids want to work,” Cartiglia said. “Now do you think anyone you know would want to say, ‘I can’t wait to grow up so I can hand paint little doll cookies as a career.’ This is not where America is. »

“Our industry is above all an import industry”

Another product just beyond the toy market which is experiencing identical upheavals: board games.

In Sheboygan, Wisconsin, Lynn Potyen owns The GameBoard, a store that has sold popular board games like Monopoly, puzzles and strategy games for nearly two decades. She described a “frustrating” situation for her business, one that is constantly shifting gears as gaming companies close and other shortages mount.

“Our industry is largely an import industry because there is no infrastructure here in the United States to create and build the table games that we see,” Potyen told Quartz. “This tax has forced us to change products. We have had to discontinue lines because these companies have closed their doors. We have had to change the type of games because the products are not even available in our warehouses or have been out of stock for months.”

Potyen has managed to retain his team of eight employees – a mix of full-time and part-time workers – without laying anyone off. But prudence dictated other decisions. This year, she suspended plans to take out a $60,000 construction loan to expand the store on the second floor of the 150-year-old building she owns.

“We’ve remained stable. I think everyone is really concerned and concerned,” Potyen said. “Our town is a manufacturing town. I know it’s been very difficult, so it’s just a matter of holding on.”