The ongoing US-China trade war is set to hit the American toy industry, with the potential for a decrease in doll production and a rise in consumer prices.

What Happened: William Su, a doll manufacturer, is among those grappling with the impact of increased tariffs. The decision by President Donald Trump to raise tariffs on China to 145% in April led to a halt in production for many manufacturers.

Although the tariff was reduced to 30% last month to facilitate trade talks, the uncertainty surrounding future rates has left businesses in a state of flux.

As a result, Su anticipates shipping one-third fewer dolls than usual ahead of Christmas. The tariffs have particularly affected low-margin industries like toy makers, who have limited alternatives to raising prices.

Consequently, American shoppers are expected to face a smaller assortment of goods this holiday season, and at higher costs.

According to a report by The Wall Street Journal, a recent ruling by a federal trade court that Trump didn’t have the authority to impose sweeping tariffs on the US’s trading partners has further complicated matters.

Also Read: US Tariff Impact: Prices Surge At Walmart And Target, Employees Say--Some Jumps Top 38%

However, another court put the ruling on hold, pending an appeal from the Trump administration, leaving the tariffs in place for now.

With the future of tariff rates uncertain, manufacturers liken making more dolls for the US market to “gambling”. The tariffs have also affected smaller toy makers in the US, who are having trouble getting orders through to Chinese factories, as these factories are prioritizing bigger customers.

Why It Matters: Despite a temporary reprieve in tariffs, industry executives agree that children’s dolls will be more expensive, echoing Trump’s prediction.

With around 90% of American doll imports coming from China, finding another source of dolls--and toys--is proving to be a challenge.

The trade war’s impact on the toy industry is a clear example of how international trade disputes can have far-reaching effects on everyday consumers.

As the holiday season approaches, the potential for higher prices and fewer choices could put a damper on the festive spirit for many American families.

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