By Jon Emont | Photographs by An Rong Xu for WSJ

Carly has auburn hair, blue eyes and stands 18 inches tall. Like most dolls sold in the U.S., she is made in China.

That is now a problem for her maker, William Su, who sells tens of thousands of dolls and their accessories a year to Americans through Amazon, Walmart and Target. When President Trump raised tariffs on China to 145% in April, Su, who is based in New York and Taiwan, stopped production because he and his buyers couldn't afford the tariffs.

When, last month, the president cut the tariff to 30% for a 90-day period for the U.S. and China to continue trade talks, Su quickly ramped up his factories and pushed his buyers to accept price increases. Nevertheless, weeks of lost production, and uncertainty over where tariffs will land after the 90-day reprieve, means Su expects to ship one-third fewer dolls than usual ahead of Christmas.

"Some toys like dolls and doll strollers we have no alternative other than China in 2025," Su said. With the future of tariff rates uncertain, making more dolls to ship into the U.S. is "like gambling," he added.

Trump's China tariffs have been hurting low-margin industries such as toy makers, where companies say there are few alternatives to raising prices. As a result, these businesses expect American shoppers to face a smaller assortment of goods this Christmas -- and at a higher cost.

Now, growing confusion around the direction of U.S. tariffs is further buffeting businesses. A federal trade court ruled last week that Trump didn't have the authority to impose sweeping tariffs on the U.S.'s trading partners. But, a day later, another court put the ruling on hold, pending an appeal from the Trump administration and leaving the tariffs in place for now.

Businesses worry the tariff rates could go up further in August, when the 90-day period of reduced tariffs on China is set to come to an end.

The rush to get dolls shipped during the 90-day period means businesses have little leverage to demand their Chinese suppliers cut prices to help offset the duties, which, even at lower levels, are at historic highs.

Smaller toy makers in the U.S. say they are having trouble getting orders through to Chinese factories, who are giving priority to bigger customers. Some larger toy makers are arranging to cut doll production later this year, expecting that higher prices will dent demand.

"You can sell a lot more dolls at $15 than you would at $20 or $25," said Isaac Larian, chief executive of MGA Entertainment, a Walmart supplier and one of the world's largest toy producers, behind brands such as Bratz. He says the 30% tariffs are causing him to raise prices for his China-made dolls by about 10% to 30% and trim production. "Why tax children's joy?" he said.

In recent weeks, dolls have become an unlikely flashpoint in the Trump administration's trade war with China. In April, the president made headlines when he mused that his tariffs on Chinese imports could mean that "maybe the children will have two dolls instead of 30 dolls."

"And maybe the two dolls will cost a couple of bucks more," said the president, who has described the stiff tariffs as necessary to bring back the manufacturing jobs lost over the years to competition from cheap Chinese producers.

Then, after Trump agreed in May to slash the tariffs for 90 days, doll sellers told their Chinese suppliers to increase production to take advantage of the short window.

Despite the reprieve, industry executives say Trump's prediction that children's dolls will be more expensive is proving to be true.

"China, in particular, represents a lot of volume in certain categories like electronics and toys," warned Walmart CEO Doug McMillon after the tariff rate was lowered. "All of the tariffs create cost pressure for us, but the larger tariffs on China have the biggest impact."

Trump responded with a Truth Social post, saying, "Between Walmart and China they should, as is said, 'EAT THE TARIFFS.'"

Finding another source of dolls -- and toys -- is tough.

China began pushing into the toy industry a half-century ago. Its low wages and talented craftspeople quickly made it a go-to location for toy brands. Labs sprang up around the country, making it easy for brands to test that the paint used in their dolls didn't contain lead and that easy-to-swallow parts were safely secured.

Today, China has both the machinery and engineering know-how to mass-produce dolls' plastic bodies, as well as armies of laborers to dress them, sew on hair and paint their faces. Around 90% of American doll imports come from China, according to seaborne shipment data from S&P Global Market Intelligence, a figure that has remained steady over the last decade. Many American Girl dolls are made in China, as are a significant share of Barbies.

Su's toy, furniture and lighting company, Teamson, has three factories in Vietnam, but he says it had made little sense to move doll production from China until Trump's tariffs.

"You have the hair, you have the doll, you have the clothes, you have the plastic furniture. To move all this in unison, it's hard," Su said. "There's a lot of momentum not to do it."

Joann Cartiglia, a history buff in Ticonderoga, N.Y., turned to China when she began selling handcrafted historical dolls 10 years ago.

It was easy for her to find a manufacturer for even the smallest accessories, such as a miniature metal flour sifter. And Chinese artisans hand-painted the lips, freckles and eyebrows so skillfully that each doll looked identical, she says.

Cartiglia paused production of her dolls in April and began laying off employees from her New York operation. On her website some items read "SOLD OUT! ETA SUBJECT TO TARIFFS!"

"There will be fewer products. And it's going to be wildly expensive," she said.

Cartiglia said she isn't ordering new dolls, afraid that tariff rates will rise further by the time hers are ready to ship. She is trying to whip up new product lines, for instance by buying glass jars and filling them with excess inventory of doll-sized candy and cookie figurines. She had planned to fund her retirement by eventually selling her business, but now she worries she will go bankrupt first.

"You know 30%, especially at this point, is a lot of extra money for me to have to come up with," Cartiglia said of the tariffs.

Write to Jon Emont at jonathan.emont@wsj.com

(END) Dow Jones Newswires

June 07, 2025 11:00 ET (15:00 GMT)

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