US retailers fear tariffs may cause Christmas toy shortage

US President Donald Trump's China tariffs are threatening Christmas.

- DAISUKE WAKABAYASHI

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 America.

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 that have shared their plans with The New York Times have not yet cancelled their orders. They hope that the president will back away from the tariff brinkmanship.

But the alarm in the industry is palpable, with the 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, chief executive of the Toy Association, a US 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 the changing preferences of children. From materials to machinery, China’s factories are one-stop shops for importers.

Kara Dyer, founder of Storytime Toys, a maker of children’s books with play-set puzzles, 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 two-thirds of her annual revenue.