Christmas shopping in the US begins with higher prices for toys, which have already increased by 6.6% in one year. In September alone, the price increase was 4.2% compared to August on a seasonally adjusted basis, the latest data on consumer inflation show. Thus, the gift list for many families faces a more limited budget.
The pressure comes from two fronts - US tariffs on Chinese imports and higher costs for energy, raw materials and transportation. Most toys sold in the US are made in China, and a significant part of them are made from petroleum-based plastics. Higher oil prices are making it more expensive to produce and transport goods to stores.
“Both factors seem to be already being fed into prices“, said David Silverman, a senior director at Fitch Ratings, quoted by Reuters. According to him, the consequences of the conflict with Iran on commodity and transportation prices will be felt over the next few quarters.
Tariffs continue to affect prices
US tariffs on Chinese goods are already lower than the initial 145% rate introduced by the Donald Trump administration. In May 2025, it was reduced to 30%, and in late September Washington and Beijing agreed to further reduce tariffs on goods worth $30 billion.
However, this does not mean immediate lower prices in stores. Jay Foreman, chief executive of maker Basic Fun, said the industry has used the higher tariffs to price goods that hit shelves in the fall. “Tariffs add a tangible cost to toys and other goods,” Foreman said.
Matthew also sees modest inflationary pressure related to events in the Middle East, while Hasbro CFO Gina Goethe pointed to higher input costs. Neither company would comment further to Reuters on the specific impact on final prices.
Higher fuel costs pass through to goods
Headline inflation in the United States rose 3.7 percent in September from a year earlier, up 0.6 percent month-on-month. Gasoline prices rose 9.1 percent in the month. The average price has reached $4.33 a gallon, and diesel has risen to $6.33.
Diesel is a key cost for trucking goods. So higher fuel prices could gradually affect not only toys but also shoes, clothing, electronics and other goods that depend on international deliveries.
The pressure on consumers is now taking on a political dimension. In a Reuters/Ipsos poll conducted through Oct. 5, 21% of respondents approved of President Donald Trump's actions on the cost of living, while 67% disapproved.
Sources: ca.marketscreener.com, apnews.com