Trump on possible toy shortage: "Maybe the children will have two dolls instead of 30"
Why it matters: American retailers are growing worried that the president's trade war and increased volatility will lead to empty shelves, higher prices and store closures as Chinese imports screech to a halt.
The CEOs of Walmart, Target and Home Depot privately warned him last week about the likelihood of product shortages and price spikes.
Driving the news: "Somebody said, 'oh, the shelves are gonna be open,'" Trump told reporters Wednesday. "Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more."
The big picture: His comments came amid growing concern that that the 2025 holiday shopping season will be significantly disrupted.
Toy Association CEO Greg Ahearn told the New York Times this week that the industry is facing "a frozen supply chain that is putting Christmas at risk."
"If we don't start production soon, there's a high probability of a toy shortage this holiday season," Ahearn said.
Zoom out: Trump argues that higher tariffs will force manufacturers to produce more goods in the U.S., creating jobs and tax revenue. But critics say it will lead to higher prices and hurt American exporters.
Reality check:"There will be a Christmas, and people will celebrate Christmas, and they will buy items, and we will sell them those items," Walmart CEO Doug McMillon told reporters earlier this month.
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CCTV Script 13/08/2025
The market has largely viewed the latest overnight release of the Consumer Price Index (CPI) inflation report in a positive light. The nominal CPI rose by 2.7% year-on-year, slightly below the expected 2.8%. The report also indicated stronger-than-expected inflation in service, while goods inflation came in lower than anticipated. These figures have reinforced market expectations for a rate cut and boosted the performance of U.S. stocks overnight. Specifically: All three major U.S. stock indices rose by more than 1% overnight, with the S&P 500 and the tech-heavy Nasdaq Composite both closing at record highs. According to CME FedWatch, the market's probability of a 25-basis-point rate cut by the Federal Reserve in September has increased from 85.86% the previous day to 94.93%. Although the market widely expects a rate cut in September, the focus among those supporting the move varies. Some are paying attention to inflation trends, while others are closely monitoring employment data. First, regarding the impact of Trump's tariff policies on inflation, expert opinions are divided. One camp argues that the effect of tariffs on U.S. inflation is actually quite limited. "Now you have six months of evidence, I don't really think tariffs cause inflation. Taxes don't cause inflation. And so what you're seeing in the data is very muted effects that are one time increases in the price level." It's worth noting that James Bullard is currently considered a top candidate for the next Federal Reserve Chair. In an interview with CNBC overnight, he also stated that he expects the Fed to cut rates by a total of 100 basis points over the next year. Meanwhile, another camp in the market warns that the impact of tariffs on inflation may gradually become more apparent in the future. Experts caution that, in addition to nominal CPI, it's crucial to monitor the trajectory of core CPI. "We are seeing a little bit of an uptick in the sequential core inflation and underlying inflation data. And I think a large part of that is the moderate impact we're seeing of tariff pass through that that is likely to grow in the months ahead." Additional analysis points out that while businesses may absorb costs in the short term, they will ultimately pass them on to consumers, particularly in industries with already narrow profit margins. "For instance, groceries, I mean, there's very little margin there. They're going to, you know, your tomato prices are going to go up because of because they can't really absorb, you know, those prices. It's just a matter of time that this, that the tariff related inflation starts to show up in the data." Finally, it's noteworthy that no consensus has yet been reached within the Federal Reserve regarding the pace of future rate cuts. Currently among Fed officials, Michelle Bowman and Christopher Waller represent the dovish camp advocating for . However, Jeffrey Schmid, President of the Kansas City Fed struck a hawkish tone overnight, arguing for . With moderate voices further complicating the divide, analysts suggest that even if the Fed initiates a cut in September, the pace may remain measured due to persistent internal disagreements.
