Americans Embrace Artificial Trees Despite Import Challenges

On a recent day in December, Mark Latino and his team at Lee Display in Fairfield, California, were busy crafting tinsel for artificial Christmas trees. The company, founded by Latino’s great-grandfather in 1902, is one of the few remaining manufacturers of artificial trees in the United States, producing around 10,000 each year. Despite their local production, American consumers overwhelmingly prefer artificial trees, which are primarily sourced from overseas.

The impact of tariffs on imported Christmas decorations has prompted significant changes in the industry this year. According to the American Christmas Tree Association, prices for artificial trees increased by 10% to 15% due to new import taxes. This adjustment has led retailers to reduce their orders and absorb higher costs for the stock they bring into the country. Despite these challenges, many manufacturers do not anticipate moving large-scale production back to the U.S., as the labor-intensive nature of artificial tree production relies heavily on components that are not produced domestically.

Chris Butler, CEO of the National Tree Co., which sells over 1 million artificial trees annually, emphasized that American consumers are price-sensitive when it comes to holiday decorations. “Putting a ‘Made in the U.S.A.’ sticker on the box won’t do any good if it’s twice as expensive,” Butler stated. Approximately 80% of U.S. households that set up Christmas trees this year opted for artificial varieties, a trend that has remained stable for at least the last 15 years.

The convenience of artificial trees contributes to their popularity. Many consumers prefer pre-lit models, with 80% of artificial trees sold each year featuring lights already strung. This demand has driven production away from the U.S., with manufacturing first shifting to Thailand in the early 1990s and later to China. According to Butler, “Winding lights around the branches is time-consuming and tedious.”

Artificial trees take one to two hours to assemble, from molding and cutting the needles to attaching the lights. In China, where 90% of artificial trees are produced, workers earn between $1.50 and $2 per hour. The efficiency of these workers is notable; Harman, CEO of Balsam Brands, remarked that watching them work is “like watching an Olympian.”

Balsam Brands, based in Redwood City, California, explored the possibility of relocating some manufacturing to Ohio during the initial tariff discussions of the Trump administration. After consulting experts and analyzing costs, the company determined that a tree currently priced at $800 would cost $3,000 if produced in the United States. The search for local suppliers for even minor components proved equally challenging.

Lee Display’s operations are modest, employing three to four people year-round, with additional staff brought on during the holiday rush. The company generates half its revenue from custom displays for retailers like Macy’s and the other half from direct sales. Latino highlighted the advantage of local production, saying, “You have more control over it.”

Despite this, Lee Display has also felt the effects of tariffs. Latino’s son, James, reported that the company opted not to import lights or decorations from China this year, relying instead on existing stock. As supplies dwindle, they will face higher import costs in the coming year.

Some companies are actively seeking to diversify their production sources to mitigate reliance on China. National Tree Co. has begun shifting some manufacturing to Cambodia and could potentially source all its trees from outside China by next year. However, these shifts do not insulate them from the impact of tariffs. Tariffs on artificial trees from China currently average 20%, while a proposed 49% tariff on products from Cambodia was eventually lowered to 19%.

As a result of these economic pressures, Butler indicated that his company has imported fewer trees this year and raised prices by 10%, using some of the revenue to offer discounts to customers concerned about the economy.

Balsam Brands also felt the pinch, cutting its workforce by 10%, freezing raises, and even stopping weekly office lunches to manage costs. Harman reported a 5% to 10% decline in U.S. sales, while international sales increased by over 10% in markets like Germany, Australia, Canada, and France.

“The impact of tariffs has clearly reduced U.S. demand,” Harman concluded. “If a merry Christmas is measured by the number of decorations people put up, this year may be slightly less merry.”