How the U.S. 145% tariff on Chinese toys affects toy wholesale business

The Background: U.S–China Trade Tensions and the Toy Industry

A Brief History of Tariffs on Toys

Since the start of the U.S–China trade conflict in 2018, multiple rounds of tariffs have been imposed. Initially, toys were spared. However, with ongoing tensions and political shifts, more categories were added over time. In 2024, toys officially made it to the tariff list. By 2025, the U.S. raised tariffs on certain toy imports from China up to 145% , citing reasons such as national economic protection and trade imbalances.

Why Toys?

Toys are one of the top exports from China , with over 70% of the world’s toys produced by Chinese toy factories . Targeting this sector directly affects the cost structure of American toy companies and wholesalers, while also putting pressure on Chinese manufacturers.

Direct Impact on Chinese Toy Factories

Rising Costs and Shrinking Margins

With the new tariff in place, the landed cost of Chinese-made toys in the U.S. has increased dramatically. Many toy factories now face mounting pressure to either absorb the cost or pass it on to buyers—neither of which is sustainable long-term.

• Raw material prices are rising.

• Labor costs in China continue to increase.

• Tariffs add another layer of burden, eroding manufacturer profit margins.

Order Volumes Are Dropping

Many U.S. toys wholesale companies are temporarily halting orders or reducing quantities. This is mainly due to:

• Drastically higher landed costs

• Customers’ resistance to price increases

• Market uncertainty

Some wholesalers are considering sourcing from countries like Vietnam, Indonesia, or India. However, these markets often lack the scale and experience that Chinese suppliers offer.

OEM and ODM Services as a Competitive Edge

To stay competitive, Chinese toy factories are pushing further into OEM/ODM manufacturing , offering:

• Custom packaging

• Private label toys

• Faster prototyping and compliance testing

Factories that can help wholesalers add value beyond price are now in higher demand.

How Toy Wholesalers in the U.S. Are Affected

Import Costs Skyrocketing

The most immediate effect of the 145% tariff is visible in bottom-line costs. A container of toys previously valued at $50,000 now costs over $70,000 or more with tariffs applied.

Wholesalers are forced to decide whether to:

• Absorb the costs

• Raise prices for retailers

• Reduce inventory and diversify sourcing

Shifting Supply Chains

Wholesalers are diversifying supply chains to offset the risk of relying solely on China. However, Chinese suppliers are still unmatched in:

• Design capabilities

• Consistent product quality

• Efficient large-scale production

Mid-Term Strategies for Toys Wholesale Businesses

Vestir’t Abandon China—Adapt Your Approach

Reliable Chinese toy factories are still valuable partners if you:

• Focus on higher-margin, niche products

• Use factories offering factory-direct pricing and customization

• Leverage long-term partnerships for cost transparency and flexibility

Look for Factories with Overseas Warehousing Options

Overseas warehouses in the U.S., Mexico, or Southeast Asia allow toy wholesalers to:

• Avoid immediate tariff hits

• Shorten delivery cycles

• Hold flexible inventory closer to customers

Add Value Through Branding & Licensing

If you're selling generic, low-cost toys, your margins are the most vulnerable. Shift to:

• Branded educational toys

• STEM kits

• Creative DIY sets

These products allow for higher markup , justifying the higher import cost.

Long-Term Outlook: Is This the New Normal?

Political and Economic Uncertainty

Trade policies are often tied to political cycles. A change in administration or bilateral agreements could potentially reduce or reverse tariffs—but planning for that is risky.

Meanwhile, U.S. retailers and wholesalers must operate in this high-tariff environment for the foreseeable future .

A More Resilient Toy Supply Chain

The upside? The industry is adapting:

• Chinese factories are upgrading processes and automation

• Wholesalers are becoming smarter about supplier diversification

• There's a push toward eco-friendly and compliance-certified toy production

Final Thoughts: Turning Crisis Into Opportunity

For the toys wholesale industry, the 145% tariff may seem like a threat—but it’s also a catalyst for evolution. Those who adapt fast, build stronger relationships with value-focused toy factories , and diversify their sourcing and branding strategies will emerge stronger.

No AINEK TOYS , we support toy wholesalers with:

• Factory-direct pricing

• Flexible OEM/ODM production

• U.S. and EU market compliance

• Custom packaging and design support

📩 Looking for a reliable toy factory partner in 2025?
Contact AINEK TOYS to explore our latest catalog and get a free quote.