As China and the U.S. announced a series of tariff modification measures aimed at easing trade tensions, American toy businesses are welcoming the reprieve as a lifeline – one that could ensure children have toys under the tree this holiday season.

Under the agreement, U.S. tariffs on Chinese goods will be reduced from as high as 145 percent to 30 percent for a 90-day period. This temporary rollback gives U.S. importers a narrow but critical window to replenish inventory and stabilize operations ahead of the holiday rush.

Zhang Dan, manager of Taizhou Teamyouth Arts & Crafts Company, which primarily produces Christmas toys and decorations, told a CGTN reporter that the suspension of tariffs has allowed the company to resume previously stalled orders.

"We're now either exporting those suspended goods as quickly as possible or actively engaging with more American customers," Zhang said.

For small U.S. toy business owners like David Mauro, who runs Jesusdoll.com – a niche brand making Christian-themed talking dolls – the tariff rollback has meant the difference between having products for Christmas and shutting down operations altogether.

"We're a seasonal company," Mauro said in an interview with CBS News. "If the 145 percent tariff had stayed, we would have had to sell overseas or close for the year. This change means there will be a Christmas for us and our customers."

While Mauro acknowledges that even a 30 percent tariff is "painful," he said it's at least manageable.

With only 90 days of tariff relief and no guarantee of an extension, manufacturers and retailers remain on edge. "We're trying to move quickly, but it's a race against time," said Mauro. "What we need is policy consistency, not just short-term patches."

Major players in the toy industry share Mauro's concerns. Jay Foreman, CEO of Basic Fun!, called the tariff reduction a temporary lifeline.

"At 145 percent, we're out of business," Foreman told NPR. "At 30 percent, we can operate, but just barely. We're still absorbing significant costs."

Foreman also highlighted the broader ripple effect of trade policy instability. "Manufacturing is just one piece of the puzzle. Retailers, freight companies and consumers all feel the shock when tariffs swing unpredictably. If these costs are passed down, toy prices could rise 10 to 15 percent."

'No short-term alternative'

Trade analysts warn that the toy industry remains highly vulnerable.

"The U.S. has leverage over China in some sectors, but not toys or holiday goods," said former New York Times columnist Charles Blow during a CNN interview. "You can't just pull 90 percent of Christmas goods from China and expect to fill that gap domestically."

According to 2024 data from the U.S. International Trade Commission, 78.3 percent of toy imports and 85 percent of Christmas-related goods – including decorations, lights and artificial trees – come from China. Other estimates, such as those by the Toy Association, suggest that up to 80 percent of all toys sold in the U.S. are made in Chinese factories.

Experts also stress that while some companies are exploring supply chain diversification, it's a long-term effort. "Factories don't appear overnight," said Claire Huber, a spokesperson for the U.S. International Trade Commission. "Until then, the U.S. toy industry will remain closely tied to China."

Greg Ahearn, president and CEO of the Toy Association of the U.S., echoed this point in an interview with CNN. "It's absolutely not a short-term shift. Building out capacity elsewhere will take three to five years," Ahearn said. "Eighty percent of toys made in China involve manual labor – like face painting, hair decoration, correct positioning and packaging. Much of that can't be automated here in the U.S."

Gilberto Garcia-Vazquez, chief economist at Datawheel, summed it up: "The reality is, there is no short-term alternative to Chinese manufacturing when it comes to toys. The scale, infrastructure and supply chain built in China over decades can't be replicated overnight."

Chinese toy makers pivot to diverse markets

Manager Zhang also told CGTN that her company plans to diversify its customer base to reduce dependence on the U.S. market in case of future tariff changes.

In Dongguan – a manufacturing hub home to over 5,500 toy-related enterprises and producer of nearly 25 percent of the world's animation derivatives and 85 percent of China's designer toys – companies are increasingly tapping into domestic demand through e-commerce.

In early April, Chinese e-commerce giant JD.com launched a 200-billion-yuan ($27.7 billion) procurement initiative to help foreign trade enterprises quickly expand into the domestic market.

Dongguan Jollybaby Products Company, which previously derived 20 percent of its export revenue from the American market, has been quick to seize the opportunity.

Wang Zhen, director general of Dongguan Jollybaby Products Company, told CMG that the company's cloth books sold over 80,000 copies on the e-commerce platform in less than two weeks.