Americans are about to face an expensive year-end shopping season with few choices.

Retailers warn of limited variety and high prices for the holiday shopping season as tariffs become more volatile.

In the midst of the peak summer season, businesses in the US are scrambling to finalize orders and set prices for the coming winter. Balsam Hill, which sells artificial trees and decorations online, plans to scale back its new holiday product line as products are expected to change, delay and adjust in response to President Trump’s tariffs.

“We’re spending all our time adjusting our order mix, where we’re coming from and when we’re going to get our products to our warehouses,” said Mac Harman, CEO of Balsam Brands, parent company of Balsam Hill. He admitted he doesn’t know which products to advertise in advance to stimulate demand in the current climate.

Months of uncertainty over which countries will see higher tariffs and by how much have cast a shadow over the 2025 holiday shopping season in the US. Typically, retailers start planning for this peak season in January and close most orders by the end of June.

But the recent unusual tax adjustments have forced them to rethink. To avoid risking high taxes and inventory risks, some companies have reduced their new collections. Others are still planning for prices, but many items will increase in price, with the exact amount depending on the corresponding tax package that will be implemented from next month.

Customers choose toys at a Target store in Chicago, USA on November 26, 2024. Photo: Reuters

The US toy industry, which sources nearly 80% of its supplies from China, has been hit hard. Manufacturers typically ramp up production in April, but this year the ramp-up was delayed until late May after President Trump imposed a 145% tariff on goods made in China. Tariffs have since been reduced significantly thanks to a framework agreement between the US and China, but they still cast a shadow over the upcoming holiday season.

Greg Ahearn, president and CEO of the Toy Association, said production at small and mid-sized companies has fallen sharply compared to the same period last year. Meanwhile, toy suppliers from China and elsewhere have been sending out price increases. For example, Schylling, which makes Needoh, Care Bears and modern versions of classic toys like My Little Pony, has raised its order prices by 20%.

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Dean Smith, co-owner of JaZams toy stores in Princeton, New Jersey, and Lahaska, Pennsylvania, said wholesale prices for some items have increased by 20%. But the corresponding price increases could deter customers.

So he sought to “maintain a reasonable profit margin without pushing prices beyond what consumers can accept.” He chose to import the cheaper Crazy Forts assembly model and eliminated the children’s version of the Anomia card game because he didn’t think customers would accept the new prices. “I had to eliminate half of the products that I buy every year,” he said.

According to the U.S. Chamber of Commerce, more than 97% of U.S. buyers of imported goods are small businesses. Many of them are struggling because tariffs have caused their costs to skyrocket. A National Retail Federation (NRF) face-to-face interview with 40 retailers nationwide earlier this month found that businesses were forced to raise prices, narrow their product offerings or take losses.

Kathy Knack, owner of Kathy Knack Interiors in Virginia, sources her products from Vietnam, China and Mexico. “With the uncertainty of tariffs — one time it was 40%, then it jumped to 145% — my suppliers couldn’t figure out their prices and neither could I,” she said.

The fluctuating tariffs have made their operations difficult and nearly impossible to plan, price or expand. Mei-Lon Jimenez and Toni Jimenez, co-founders of Texas-based cosmetics brand Chica Beauty, said the majority of their products are made in the United States, but some inputs are imported and increase in price. “Every time we adjust our plans, it’s like we’re hitting a moving target,” Jimenez said.

The U.S. retail industry may have to respond passively to the White House's tariff ultimatums and temporary extensions. Last week, President Trump again adjusted tariffs on imports from Brazil, the EU, Mexico and other major trading partners, announcing they would take effect on August 1.

Taking advantage of that milestone, the Port of Los Angeles recorded its busiest June in its 117-year history, as businesses raced to import goods for the Christmas season. Port Executive Director Gene Seroka said imports also increased sharply in July. "We are seeing a peak in imports to get ahead of the threat of higher tariffs later in the summer," he said.

The pace of activity at the Port of Los Angeles has fluctuated with the president's tariff announcements so far this year, slowing when he increased tariffs and then picking up when the policy was paused.

"For consumers, this means less choice and higher prices as the holiday season approaches," said Gene Seroka.

Dean Smith at JaZams said he has placed holiday orders two months earlier than usual for “essentials that are priced right.” He has also doubled his warehouse space. He admitted that maintaining product variety is getting harder by the day.

“Our goal is to create joy with our customers, and this year we’re going to do our best to do that. But the reality is, we don’t have enough of the products that consumers want,” he admitted.

Phien An (according to AP, NRF)