U.S. toymakers struggle with $1 billion tariff shock ahead of Christmas
In April, President Donald Trump surmised that American kids would be fine with owning fewer toys as the price of success for his signature tariffs.
“Well, maybe the children will have two dolls instead of 30 dolls, you know?” the president said after a marathon cabinet meeting at the White House. “And maybe the two dolls will cost a couple of bucks more than they would normally.”
That wasn’t the end of the Trump administration presaging tariff-fueled headaches for toymakers banking on robust sales. White House senior aide Stephen Miller later said he believed Americans are willing to pay more for higher-quality toys if they were made in the U.S.
As Americans enter the December holiday season, that isn’t the reality that’s settling in. Tariffs are now hitting the once tariff-free toy sector in the U.S., restoring import taxes to levels unseen since the mid-20th century. Now, toy companies of all sizes are scrambling to reorganize massive supply chains to avoid paying double-digit tariffs while wrestling with the uncertainty unleashed within the U.S. economy.
“I would think we are probably back to the toy tariff rates of the 1940s,” Ed Gresser, the director of trade and foreign markets at the Progressive Policy Institute, told Quartz. He observed that manufacturers in the U.S. have broadly shed jobs for nine months and there’s been little, if any, sign that U.S. toymakers are on-shoring their production.
Unlike other products like coffee and bananas that had tariffs lifted, toys aren’t getting a carveout as they once did in the first Trump administration. China and Vietnam are the two largest toy exporters to the U.S with the former composing 80% of all U.S. toy imports. Within China, the toy industry has a robust foothold in particular since a fleet of factories can rapidly mass-produce toys with the low-cost labor available.
Both countries have double-digit tariffs: For China, the tariff rate stands at 30% with a one-year pause in trade hostilities in effect. In Vietnam, the rate is 20% following a chaotic preliminary trade accord that’s still being hammered out.
Estimates vary on the amount of tariffs collected on imported toys. Gresser has calculated that $888 million of tariffs were levied on toys and dolls from January to July 2025. We Pay the Tariffs, a small business advocacy group, estimates $1.2 billion in tariffs have hit the U.S. toy sector from the start of the year through August.
Regardless, the tariffs did end a three-decade long stretch of duty-free treatment for toys that traced its origins to a global trade agreement known as the 1995 Uruguay Round, Gresser said.
Bottom lines of retailers have been dented virtually across the board. Tariffs that fluctuated through most of 2025 affected company decisions on shipping, hiring, and ultimately, pricing.
In its latest quarterly report filed with federal regulators in October, the toy giant Mattel acknowledged that tariffs were contributing to “substantial uncertainty” around its business.
It reported a slight slump in net sales in the third quarter of 2025, down 6% compared to the third quarter of 2024 and missing analysts’ expectations. The company said in May that it was raising prices on its signature products including Barbie dolls in response and also had to eject its financial forecast.
The financial pain, though, is amplified among smaller toy store owners, who have less room to maneuver with thinner margins. That’s the case for Joann Cartiglia, the 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 hardscrabble business landscape made even more volatile by the armada of 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 volunteers part-time). Her doll sales are down by 60% this month compared to last year, a trend she attributes to the tariffs.
Cartiglia believes it’s simply impossible for domestic toy brands like hers to become fully self-sufficient in the U.S. She says her products are handmade in batches ranging from 500 to 1,500 at a time, and no domestic labor or physical infrastructure exists in the U.S. to support it.
“American brands create jobs that are not there. We create jobs in marketing, distribution, and customer service, in all of these areas where kids want to work,” Cartiglia said. “Now, do you think anybody you know would want to say, ‘I can’t wait to grow up so I could hand paint little cookies for dolls for a career.’ That’s not where America is.”
A sign for GameBoard store in Sheboygan, Wisconsin (Photo courtesy of Lynn Potyen).
Another product just beyond the toy market experiencing identical turmoil: Board games.
In Sheboygan, Wisconsin, Lynn Potyen owns The GameBoard, a store selling popular board games like Monopoly, puzzles, and strategy games for nearly two decades. She described a “frustrating” situation for her business, one that’s constantly shifting gears as game companies shutter and other shortages abound.
“Our industry is very much a import industry because there is no infrastructure here in the United States to create and build the tabletop games that we see,” Potyen told Quartz. “This tax has caused us to have to switch products that we’re bringing in. We’ve had to discontinue lines because those companies have closed down. We’ve had to change to different kinds of games because the products are not even available in our warehouses, or have been out of stock for months at a time.”
Potyen has managed to keep her staff of eight employees — a mix of full and part-time workers — without letting anyone go. But caution dictated other decisions. She paused plans this year to take out a $60,000 construction loan to expand the store onto the second floor of the 150-year-old building, which she owns.
“We’ve kind of maintained steady. I think everybody is just really concerned and worried,” Potyen said. “Our town is a manufacturing town. I know this has been really hard, so it’s just a matter of holding out.”
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