How Tariffs Are Disrupting the 2025 Holiday Shopping Season

Tariffs are reshaping retail planning as the 2025 holiday season approaches across the United States. Businesses are scrambling to adjust product lines, pricing strategies, and supply chains in response to President Donald Trump’s fluctuating trade policies.

Fewer Products, Higher Prices

Retailers typically finalize holiday orders by June, but this year’s volatile tariff landscape has delayed decisions. Balsam Hill, known for its artificial trees and ornaments, had to scale back catalog plans due to shifting import taxes.

“We don’t know which items to feature anymore,” said Mac Harman, CEO of Balsam Brands.

This uncertainty has led to limited stock and thinner inventories—a trend affecting major players and independent stores alike. Many fear they won’t be able to replenish hot-selling items in time.

The Toy Industry Takes a Hit

The U.S. toy market, which sources nearly 80% of its inventory from China, feels the squeeze most acutely. Production usually begins in April but was delayed to late May due to a 145% tariff imposed on Chinese goods.

Greg Ahearn, CEO of the Toy Association, noted that smaller companies have reduced manufacturing as a result. Holiday stock is only now arriving at U.S. ports—too late for early-season testers.

“It’s risky to stock up on items that could carry unpredictable costs,” said Hilary Key, owner of The Toy Chest in Indiana.

Retailers Adjust Tactics

Dean Smith, co-owner of JaZams toy stores in New Jersey and Pennsylvania, has already cut half of his usual product lines. After a 20% wholesale price hike from a Canadian distributor, he replaced higher-cost toys with more affordable alternatives.

“We’re trying to keep prices fair while staying in business,” he said.

Meanwhile, store owners like Key are avoiding Chinese imports altogether. Schylling, a popular brand for retro-style toys, increased prices by 20%, forcing some retailers to pass on stocking fan favorites like Needoh and My Little Pony.

tariffs holiday shopping 2025

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)

Port Activity and Consumer Behavior

In response to looming tariffs, retailers are importing early. The Port of Los Angeles saw its busiest June in 117 years, with strong July numbers expected, according to Executive Director Gene Seroka.

“We’re seeing a tariff whipsaw effect—imports spike when tariffs pause,” Seroka said.

The Trump administration delayed new tariffs on goods from Brazil, Mexico, and the EU until August 1, giving importers a narrow window to ship at a lower 10% rate. But most retailers say it’s not enough.

Holiday Shopping Outlook

Consumers should expect higher prices, fewer choices, and potential shortages of this year’s most-wanted gifts. Items like Jellycat plush toys and oversized stuffed animals are already flying off shelves, and restocking them later might be impossible.

“We doubled our warehouse space just to get ahead,” Smith said. “But keeping up with costs is getting harder every day.”

For companies like Balsam Brands, the goal is to spread joy—even with a reduced lineup.

“We’re doing our best,” Harman said. “But we just won’t have everything shoppers want.”

Source: AP News.