Many retailers have already begun to brace themselves for the impact of President Donald Trump’s proposed fourth tranche of tariffs — but it appears consumers may soon have to prepare their pocketbooks, too.
In mid-May, the Office of the United States Trade Representative released a list of $300 billion worth Chinese imports that could be slapped with a 25% hike in duties, including apparel and footwear. According to the Footwear Distributors and Retailers of America, such levies could cost Americans an astonishing $7 billion in additional costs per year, as companies may be forced to raise their prices in order to accommodate increasing supply chain costs.
Supporting that figure is a new report from analytics firm Semantics3, which looked at about one million products sold online from accessories and outerwear to shoes and socks. Calculating brands’ overall exposure to Chinese import price hikes, the data showed that shoppers could end up paying as much as $25 more per item from footwear brands including Nike, Ugg and Calvin Klein.
Shoe imports are already heavily taxed, with existing duties averaging 11% and going up to 67.5%. Because a wide variety of materials necessary for footwear production is sourced from China, the added tariffs are expected to affect many domestic manufacturers.
Several major shoemakers — including sportswear giants Nike, Adidas and Puma — have already begun shifting some of their production to Vietnam and other neighboring countries as labor costs in China rise amid trade war uncertainties.
Just today, more than 600 companies — including Puma North America, Levi Strauss & Co., Ralph Lauren Corp. — urged the president to return to the bargaining table and negotiate a trade agreement between the world’s two largest economies.
Early this week, Steve Madden became the latest industry leader to publicly criticize Washington’s tit-for-tat dispute with Beijing. “I don’t mean to get political, but this is an apolitical issue. Tariffs hurt everybody — they hurt employees, manufacturers, retailers. Most of all, they hurt consumers,” he said at the podium upon accepting the Visionary Award at the 2019 ACE Awards on Monday night in New York. “I’ve yet to meet anyone beyond the man in the White House who thinks this is a good idea. Why we are letting protectionism, tribalism and nationalism hurt a thriving global marketplace?”
The U.S. has already upped levies from 10% to 25% on $200 billion worth of Chinese products, leading China to retaliate with duties of 5% to 25% on $60 billion of U.S. goods. Trump continues to assert that China will bear the costs for increased import tariffs on shoes and other consumer products.
“We simply cannot understand why President Trump would use American footwear consumers as a bargaining chip in his fight with China,” president and CEO of FDRA president and CEO Matt Priest previously told FN. “These added tariffs will drive up shoe prices for U.S. consumers, take away disposable income, and hit working class individuals and families the hardest… This threatens jobs in our industry and could put U.S. footwear companies out of business.”
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