Board Thread:Suggestions forum/@comment-34204318-20180329181925/@comment-33185350-20180330155231

Merchant gifts are delivered by Dwarves, presumably separate from Gandalf. They are described here:

“On this occasion the presents were unusually good. The hobbit-children were so excited that for a while they almost forgot about eating. There were toys the like of which they had never seen before, all beautiful and some obviously magical. Many of them had indeed been ordered a year before, and had come all the way from the Mountain and from Dale, and were of real dwarf-make.” - The Fellowship of the Ring

Obviously these are novelties and mostly unknown to the hobbits, but the phrase “Had indeed been ordered a year before” indicates that some sort of trade / correspondence existed between the Shire and Dale. The toys could have been made by the Dwarves, but they would have been transported through Dale, probably taken by Dalish merchants as Dale was a trading hub. A strong alliance is doubtful, but I think it’s reasonable to say they were friendly to the Shire and on good terms if there were traders traveling between them.