Toy Store Trouble Ahead? Local Shop Owners Urge Early Holiday Buying

Toy Harbor and Corner Toy Store expect a not-so-merry tariff Christmas

By Todd VanSickle | Oct. 11, 2025

Whether you were good or bad this year, expect more tariffs in your stocking come December. At the start of the second Donald Trump presidency earlier this year, the administration imposed sweeping tariffs on a wide range of products made outside of the United States.

From January to April, the average U.S. tariff rate rose from 2.5 percent to an estimated 27 percent—the highest level in more than a century. One of the highest tariffs, 30 percent, was slapped on toys imported from China.

“Maybe the children will have two dolls instead of 30 dolls,” Trump said during a Cabinet meeting in April, where he added that American consumers might be faced with fewer and more expensive toys.

That prediction appears to be coming true. As we head toward the holiday shopping season, the toy tariffs have raised prices and left local toy stores scrambling to keep shelves full during a time of uncertainty for shoppers and business owners.

Traverse City’s Toy Harbor

Toy Harbor in Traverse City is in its 40th year. The store first opened in 1984 by Nancy Walton, who was having a hard time finding creative and quality toys for her children in northern Michigan. Her daughter-in-law, Amanda Walton, took over the business about five years ago.

The second-generation owner says she continues to offer a lot of the same educational and imaginative toys her mother-in-law had on shelves. “She always had a no weapons or guns policy, so we still carry that on,” Walton says. “We really don’t have much that requires batteries. It’s a lot of imaginative play.”

Walton enjoys seeing how toys bring happiness to her customers. “Usually, you don’t come into a toy store and are in a bad mood, so I like that everyone’s happy to be here, except sometimes little kids do leave unhappy.” (Only when they can’t buy everything they want!)

Overall, Walton says business is good, but nowadays she is constantly faced with challenges due to the recent tariffs.

“Most of the toys are just not made in the United States,” Walton says. “I would say most of them are made in China, but there are a lot that are manufactured in other countries. And now there’s a tariff no matter where you look.”

She says the most challenging part for the toy industry has been the unknown and lack of consistency with how the tariffs will be handled. “One day it might be this, and then the next day it might be that,” Walton notes. She receives multiple emails a day from suppliers about how they are going to deal with the tariffs.

“It is very challenging and kind of scary, I didn’t really know how to manage that,” Walton says of her buying planning for the holidays. “Do I invest in a lot of inventory to get ahead of the tariffs? Or, what if people don’t shop because of the tariffs? What if I am stuck with the inventory? So, it was just finding ways to manage that. I don’t think the toy companies know how.”

In the first part of the year, toy suppliers often told storeowners to wait out the tariffs and see what happens, while others cut inventory or passed on all the extra tariff costs immediately. By mid-summer, Walton started to see the effects of the tariffs and had to adjust her prices.

“Some things, it’s really minimal. Like I have these little charms, and they went up $1,” Walton says. “And then I have another product that’s really popular, these little do-it-yourself models, and those each went up $10 per model. Every company handles it differently and passes it on differently.”

To balance the tight margins of owning a small business, “I have had to pass on not 100 percent, but I would say the majority” of the price increases onto customers, Walton says.

Frankfort’s Corner Toy Store

Ben MacRae and his wife Amy have been in the toy business for 20 years. They own Corner Toy Store in Frankfort. They started selling toys online in 2005 and three years later opened a 3,000-square-foot store in downtown Frankfort on Main Street.

Going into the Christmas season, he is cautiously optimistic. “There’s a lot of strain on people’s budgets,” MacRae acknowledges. “Obviously, a lot of things are more expensive. We’ve seen a big impact in tariffs in our industry.”

At the wholesale level, he’s seen prices jump dramatically in the last few months. The Corner Store carries a lot of toys from Europe, which has about a 10 percent tariff. But the Chinese toys are the heaviest hit with tariffs, MacRae says.

“I’ve got a baby doll manufacturer that’s got almost a 20-percent surcharge on it for tariffs,” MacRae tells us. “We can’t absorb that. It gets built right into our cost. It gets passed on to the customers directly. So the sh*tty thing is, what used to be a $40 retail baby doll is now a $50 baby.”

MacRae says tariffs aren’t the only problem—a lack of inventory is also a concern as the shopping season nears.

“I have a company that just canceled half of their catalog,” MacRae says. “So we went from having 100 items to pick from on their catalog to like 50. They’re just straight up not bringing half of their product to the United States this year, which really sucks.”

He’s also seen shrinkflation when it comes to the toy industry. “We are still early on in this, but next year I think you will see more toys still at the same price point, but there will be one less item,” MacRae says. “Instead of an eight-piece horse set, it will be a six-piece.”

He has already seen it in some of the packaging, where manufacturers “cut corners where they can.” MacRae adds, “I think we are going to see some de-contenting shortly.”

On a sobering note, MacRae says the tariffs could put his business at risk of closing its doors.

“It could be something that puts a lot of people at risk,” MacRae explains. “We can only stockpile physically and financially so much stuff. If all the manufacturers run out of product in October, you might not have a very good Christmas.”

Michigan Retailers Association Response

At the state level, Michigan Retailers Association Vice President of Communications Victoria Velda says the organization launched its Buy Nearby campaign during the first full weekend in October. She tells us the annual event highlights Michigan’s small businesses and encourages shoppers to patronize local stores.

“We’re seeing consumers starting to shop as early as the first of October,” Velda says. “So we are just really encouraging shoppers to think local and buy nearby when they’re entering that holiday shopping season.”

Per Velda, if Michigan customers shift just 10 percent of online shopping to nearby retailers, we could create more than 12,000 new jobs and boost the state’s economy by $1 billion.

In May, the Michigan Retailers Association (MRA) conducted a Retail Tariff Impact Survey with the state’s retailers. Fifty percent of respondents said they faced increased pricing due to the tariffs. More than 50 percent said they were considering changing inventory that they carried, and 36 percent said they considered changing suppliers, the survey reported.

“This survey was quite a few months ago, but the data speaks very strongly to what we’ll be seeing through the holiday season,” Velda says.

She added that the retail index—which, per the MRA website, “tracks sales, inventory, pricing, promotional activities, and hiring trends among Michigan retailers”—has been all over the board this year. It dropped to 47.2 in May, but rebounded to 60.2 in July, the highest it has been since January 2024.

Then August numbers came in at 44.9. As of press time, September numbers had not yet been released. MRA’s guidelines note that “index values above 50 generally indicate positive sales activity.”

“There’s been a lot of instability in that index this year, and consumer confidence has been right there along with it,” Velda says. “We hear consumers saying they’re buying early and buying in bulk because they wanted to avoid the tariffs.”

The Michigan Retailers Association doesn’t have any immediate plans to address the tariffs at a legislative level. But toy store owners like MacRae and Walton would like to see more consistency with the tariffs and planning done to push more manufacturing to the U.S. if that is the end objective. They say with the ever-changing landscape, it is difficult to run a business or be a supplier.

“The manufacturers don’t have time to adjust. There is no rhyme or reason,” MacRae says of the oscillating nature of the tariffs. “As a small business there is no way of combating this. You get like two days’ notice. What are you supposed to do?”

Shop Local, and Shop Now

Both Walton and MacRae agree that buying now is the best strategy for a merry Christmas.

“If you see something that you really want, or you know will be a great gift for a loved one, I would buy it when you see it, and I wouldn’t hold off, because it might not be there when you come back later,” Walton says. “I’m not super confident that I could have that same Lego for you in a month or the same stuffed animal, because there’s just uncertainty about what I can get and when it will arrive.”

MacRae agrees. “Shop early for Christmas, because there will be things you won’t be able to get. It is scary coming into a holiday season and [knowing] you might run out of product before the season ever gets there. It would be like Traverse City running out of sand before all the tourists get there in July.”

If you’re ready to shop, here are their top recommendations by age group:

Infants: Fun rattles and lovies, soft books, any toys from Fat Brain Toy Company.

Toddlers: Classic toys like blocks, jack-in-box, shape sorters, Pretend Play toys, and building sets from Magnatiles.

4 to 6 years: Stomp rockets, Calico Critters, Playmobil sets, Bruder trucks and Schleich figures.

6+ years: Fidget toys, Legos, Robotime, craft and art sets, science sets and puzzles, Corolle Dolls.

Hottest overall item: Jellycat plush toys. The mini-stuffed toy is popular for all ages, including tweens, teens, and even college students.

Find Toy Harbor at 221 E Front St. in Traverse City (facebook.com/toyharbor); and Corner Toy Store at 401 Main St. in Frankfort (thecornertoystore.com).