Holiday toy prices surge as tariffs, war-driven energy costs squeeze shoppers

NEW YORK - Cash-strapped U.S. consumers are facing tighter shopping budgets this holiday season as tariffs and elevated energy costs drive up prices.

Overall inflation is rising gradually, but toy prices have climbed sharply, increasing 6.6% over the past year, according to the latest U.S. consumer inflation data. Other products that rely on overseas shipping and petroleum-based manufacturing are also becoming more expensive.

Dig deeper:

The toy industry remains particularly vulnerable to President Donald Trump’s changing tariff policies because China manufactures a majority of the toys sold in the U.S. Many toys are also made with fossil-fuel-based plastics, meaning higher oil prices linked to the war in the Middle East could add to the sticker shock consumers see on store shelves.

RELATED: US, China agree on $60 billion in tariff cuts on goods

What they're saying:

"Those dual issues appear to be showing up in pricing," said David Silverman, senior director at Fitch Ratings, who focuses on retail and consumer companies. "The impact from the Iran conflict on commodity costs and shipping costs will certainly persist for the next several quarters."

By the numbers:

Prices for apparel and footwear also increased in September, according to the U.S. Consumer Price Index report. However, toy prices rose more than those in other consumer categories as Americans began making their holiday shopping lists. Toy prices increased 4.2% from August on a seasonally adjusted basis.

Big picture view:

After returning to the White House and imposing sweeping tariffs on Chinese imports, Trump acknowledged in April 2025 that his policies could raise prices for consumers. He faced backlash after suggesting that children might have "two dolls instead of 30 dolls."

Since then, Trump’s approval rating has fallen sharply, particularly on economic issues. A Reuters/Ipsos poll conducted through Oct. 5 found that 21% of voters approved of Trump’s handling of cost-of-living issues, while 67% disapproved.

U.S. tariffs on Chinese goods have declined from the Trump administration’s initial 145% rate to 30% in May 2025. The U.S. and China also reached an agreement in late September to reduce tariffs on $30 billion worth of imported and exported goods each.

RELATED: US ban on $1 billion worth of Canadian imports goes into effect

Still, current prices reflect the impact of previously higher tariff rates, said Jay Foreman, CEO of Florida-based toy company Basic Fun, which makes Tonka trucks and Care Bears. The toy industry used those rates to set prices for products that reached store shelves this fall, he said.

"Tariffs add a noticeable cost to toys and other goods," Foreman added. "Reducing them now will over time lower the price of toys as long as other global issues subside, like the various wars that are pushing up fuel and raw material costs."

Mattel Chief Financial Officer Paul Ruh said the Barbie maker is "seeing some moderate inflationary pressures associated with events in the Middle East." He made the comments during an August earnings call after the company reported that tariff-related costs had squeezed its profit margins. Hasbro Chief Financial Officer Gina Goetter said in July that the company had absorbed "higher input costs."

Mattel and Hasbro did not immediately respond to requests for comment about the factors affecting their prices.