The cost of your shoes could jump thanks to the US-China trade war
The White House on Monday released a fresh list of about $300 billion in Chinese goods that could get hit with 25% tariffs, if President Donald Trump decides to move forward with his threat.
That list includes footwear.
China accounts for more than 70% of all footwear imported into the U.S.
The cost of your sneakers or high heels could soon jump, thanks to another round of tariffs under consideration by the Trump administration as part of an ongoing trade war with China.
The White House on Monday released a fresh list of about $300 billion in Chinese goods that could get hit with 25% tariffs, if President Donald Trumpdecides to move forward with his threat. The list includes footwear — everything from sneakers to sandals, golf shoes, rain boots and ski shoes.
Should the tariff increase ultimately take effect, analysts say consumers would feel the brunt of the impact. And the American footwear industry is particularly dependent on China.
In 2017, China accounted for about 72% of all footwear imported into the U.S., according to the American Apparel and Footwear Association. The U.S. imported $11.4 billion worth of footwear from China last year, according to data from the U.S. Census Bureau.
“While brands have moved their production into other countries in Asia because labor costs are lower there, everybody is still making shoes in China,” said Matt Powell, a sports analyst for NPD Group. “The Chinese have years of expertise. They tend to be the best at making high-value product.”
Both Nike and Adidas — the top two sneaker makers in the U.S. by sales — have steadily been easing their reliance on China, shifting production to Vietnam instead. Both companies declined to comment when reached by CNBC.
Puma has said it’s working to do more of the same. But China still dominates when it comes to footwear manufacturing.
“For a lot of working families who buy shoes at Walmart, Target and these other retailers ... a ton of volume runs through [China], ” said Matt Priest, the president and CEO of the Footwear Distributors and Retailers of America, a trade organization. The proposed tariffs on footwear “are concerning to say the least,” he said. “It’s every single type of shoe.”
FDRA said a popular type of canvas “skate” sneaker, currently retailing at $49.99, with a 25% tariff, could increase to $65.57. The price of a typical hunting boot would increase from $190 to $248.56. And a popular performance running shoe could jump from $150 to $206.25, FDRA said.
Ultimately, a 25% tariff on footwear could cost shoppers more than $7 billion each year, Priest said — what he called a “conservative” estimate.
Courtesy : CNBC