By the End of the Year, Your Crocs Probably Won’t Be Made in China

Crocs Inc. has added its name to the growing list of brands anticipating some form of impact from President Donald Trump’s fourth tranche of tariffs — expected to hit nearly every category of goods imported from China.

Similar to some of its peers — such as Caleres Inc. and Deckers Corp — the lightweight clog maker today also confirmed that it is mulling ways to move away from China and diversify its sourcing. It currently imports about 30% of its U.S. product from the region but expects to cut that amount to below 10% for 2020. Assuming the president’s fourth proposed tranche — a 25% tariff — takes effect on Aug. 1, Crocs estimates it will shoulder about $5 million in impact.

“Our current sourcing mix reflects our need to balance ramping up incremental supply to meet the growing demand for our product and continuing our multi-year effort to reduce our sourcing from China,” the company said in a statement today. “We are evaluating various mitigation initiatives which will be implemented to lessen the impact on Crocs of any tariffs ultimately put into effect.”

So far, hundreds of fashion and footwear firms have joined the fight to stop new levies borne of the months-long tit-for-tat tariff dispute between the U.S. and China, which has seen both world powers slap new tariffs on hundreds of billions of dollars in goods from either country. In early May, trade negotiations between Washington and Beijing collapsed, leading the former to raise tariffs from 10% to 25% on $200 billion worth of Chinese goods. A separate list of products was also released by the Office of the U.S. Trade Representative that same month, suggesting another 25% hike in levies that would, for the first time, impact footwear. (That list has been dubbed the “fourth tranche” of tariffs, marking the fourth proposed round of tariff hikes since the trade dispute started last year.)

The trade war between the U.S. and China — which has lately expanded to include new threats from President Trump against Mexico — has yielded widespread concern across the fashion industry, with trade groups and corporations citing significant repercussions for both consumers and corporations.

Macy’s Inc., Steve Madden, Shoe Carnival Inc. and Wolverine World Wide Inc. are among the companies that have said they would be forced to raise end prices for the consumers in response to rising levies. In May, more than 170 shoe companies signed a public letter — endorsed by the Footwear Distributors & Retailers of America — that called for the removal of footwear from Washington’s fourth tranche of tariffs.

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