US tariffs are shaping holiday prices and shopping in uneven ways
NEW YORK — The Ah Louis Store in San Luis Obispo, California transforms into a festive spectacle each holiday season. Green garlands, towering nutcrackers, baubles, and ribbons adorn the historic downtown storefront starting in early November. Inside, shoppers browse more than 500 varieties of ornaments and a range of holiday gift baskets.
“We aim to create a magical experience,” says co-owner Emily Butler. “Whether you walk through our doors or not, our goal is to spread holiday joy.”
Yet this year, Butler and her twin sister, partners in the business, faced a tougher task: converting window shoppers into eager buyers while safeguarding profits. A lot of the decorations and stocking stuffers are imported, and some never arrived or became pricier after President Trump imposed unusually high tariffs on imported goods.
In response, the sisters shifted toward more profitable items, such as nutcrackers and gift baskets. They’ve also noticed shoppers tightening their belts, opting for a $100 gift basket instead of a $150 one, or choosing a single ornament rather than several. Butler notes, “We’re seeing more cautious spending this year.”
Alongside unpredictable tariffs, persistent inflation and weak hiring have rattled American consumer confidence. A December poll by The Associated Press-NORC Center for Public Affairs Research shows that most U.S. adults have noticed higher prices for groceries, electricity, and holiday gifts in recent months.
A Gallup index tracking perceptions of current economic conditions dropped to a 17-month low in November. Consumers also reported smaller holiday gift budgets, with expected spending shrinking by about $229 from October to November—the largest drop Gallup has recorded for this point in the season. The survey occurred partly during a government shutdown, which may have dampened spending plans.
Despite fears, the worst-case scenarios some economists warned about regarding tariff effects on consumer prices have not fully materialized. Impacts vary by product. Here’s a snapshot of what’s happening across popular gifting categories.
Toys and games were among the categories most affected by tariff-driven price increases because many are manufactured in China. The Trump administration’s tariff schedule on Chinese goods swung dramatically—from an initial 10% increase to a peak of 145%, and eventually settling around 47%.
This volatility left toy retailers unsure about what to stock for the holidays. Dean Smith, who co-owns JaZams in Princeton, New Jersey, and Lahaska, Pennsylvania, notes that Chinese manufacturers didn’t pass all tariff costs at once, but prices gradually rose with each restock. Wholesale prices for about 80% of his inventory rose by roughly 5%–20%. Some customers, unfamiliar with price hikes, may notice higher toy prices—think a doll rising from $20–$25 to $30–$35.
“For families with tighter budgets, this holiday season will be especially challenging,” Smith says.
Consumer electronics, largely produced in China and other parts of Asia, reflect similar trends. In 2023, China accounted for 78% of U.S. smartphone imports and 79% of laptops and tablets, according to the Consumer Technology Association.
Industry moves reflect broader price dynamics. Best Buy, for instance, indicated in May that tariffs pushed prices higher, but CEO Corie Barry explained that the chain also diversified its pricing to attract lower-income shoppers by stocking products at multiple price points.
“Consumers aren’t a single, uniform group,” Barry notes.
Game consoles, a perennial holiday staple, have also seen price adjustments as manufacturers adjusted prices earlier this year. Sony increased the PlayStation 5 price by $50 to $550 in August, following similar moves by Microsoft and Nintendo.
For jewelry shoppers, price pressures are tied less to tariffs and more to gold’s rising cost. The trade group Jewelers of America explains that tariff variations among countries with net positive exports to the U.S. have affected pricing in different ways. For example, watches from Switzerland faced a 39% tariff before a deal last month reduced that rate to 15%.
India, which refinishes many diamonds sold in the United States, rushed gem shipments ahead of a 50% tariff that took effect on August 27. If tariffs remain in place, higher diamond jewelry prices from India could begin to be felt in 2026, cautions Jewelers of America president David Bonaparte.
“Next year could bring price changes depending on tariff outcomes after January 1,” he says. “If these tariffs stay, prices are likely to rise.”
Holiday decorations—largely imported from overseas, especially China—continue to be affected by tariff dynamics.
Jeremy Rice, co-owner of House, a Lexington, Kentucky home-décor shop, notes that tariffs slowed much of his fall and seasonal stock production. Some larger, pricier items were skipped altogether because they would have been too expensive to retail. Prices on items that did come in rose accordingly; for example, red berry stems jumped from $8.95 to $10.95.
Rice adds that every sales moment felt the strain: “We sold thousands of these berry stems, and I winced each time at what they should have cost, knowing our supplier paid more, which in turn raised our price for customers.”
For those hoping to dodge tariff-driven price hikes, industry observers suggest shopping smart. John Harmon of technology research firm Coresight Research recommends exploring secondhand stores and off-price retailers such as T.J. Maxx, Marshall’s, and HomeGoods, which often acquire leftover stock that would have entered the U.S. before tariff changes.
ProcureAbility’s Joe Adamski points to domestically produced gifts—books, food, and beverages—as good holiday alternatives.
