Tariffs and higher import costs push up holiday gift bills by $28 billion, report finds

(WVVA) - As holiday shopping ramps up, many families are feeling sticker shock. A new report from Groundwork Collaborative, summarized in a commentary at The Century Foundation, finds holiday prices are up roughly 26% this season — and tariffs are a big part of the reason.

Groundwork’s analysis links higher import costs and tariffs to rising prices for common holiday purchases: clothing, toys, electronics, decorations and groceries. With imported goods making up nearly 90% of clothing, more than 80% of toys, and about 70% of electronics, the report estimates tariffs are adding roughly $28 billion to Americans’ holiday shopping bills — or about $130 per shopper.

The price jump is already changing plans:

• More than 40% of families say they are buying fewer gifts
• Nearly 1/3 plan to give presents to fewer people this season
• Over 10% report tapping into savings to cover holiday costs.

Overall, Groundwork projects holiday spending will fall by about 7% this year as consumers tighten their budgets

The report also finds that four out of five Americans who plan to put up a Christmas tree will choose an artificial tree this year, partly because prices for real trees have risen as much as 15%. Little choices like that add up across millions of households.

Why tariffs matter

Tariffs act like a surcharge on imported products. When those surcharges hit items people buy as gifts, the costs get baked into the final price shoppers see online and on store shelves. Groundwork’s analysis shows that the cumulative effect of these tariffs is significant enough to nudge consumer behavior: fewer gifts, different gift choices, and increased use of savings or credit.

Groundwork Collaborative experts say the combination of elevated import costs, shipping disruptions, and lingering inflation is pushing up prices right when families are thinking about gift lists and holiday meals. The group is available for interviews to explain the math behind the $28 billion figure and discuss policy options that could ease the burden for families.

Where to read the full analysis

The Century Foundation commentary summarizing Groundwork Collaborative’s findings can be read here.