Footwear associations cautioned that the industry would suffer if further duties were placed on imported goods. However, the effect might differ for each business.
Tariffs may soon raise the price of some shoes, but it’s unclear who will pay for them.
Groups representing the footwear and clothing industries recently issued a warning that President Donald Trump’s proposal to impose new or increased tariffs on imported goods, especially those from China, Mexico, and Southeast Asia, might harm lower-income consumers and have a long-term negative effect on the industry. However, the impact could differ for each business.
The effect on the industry is probably inevitable: A trade association called Footwear Distributors and Retailers of America claims that over 99 percent of the shoes sold in the US are imported, mostly from China, Vietnam, and Indonesia. According to an FDRA survey, over 60% of executives from retail and footwear brands stated they anticipate an increase in operational costs this year. Twenty percent of respondents predict increases between 11 and 20 percent, and over a third of executives anticipate a five percent increase in retail prices over the previous year.
However, researchers noted that not all businesses and brands can increase prices without offending consumers.
Simeon Siegel, a managing director and senior analyst at BMO Capital Markets, stated, “The general consensus is that the cost of tariffs will be passed on to the consumer.” “That’s good, but the truly important question is: Will the customer accept them?”
Because they have shifted some of their production out of China, larger shoe businesses are able to withstand tariffs, according to Morningstar analyst David Swartz. And because they are “selling something consumers need, and their brand is one that consumers want,” some firms can afford to raise their pricing, according to Siegel.
Businesses that don’t meet that criteria will see a reduction in their profit margins, which will ultimately force some to compromise on quality. According to Swartz, Amazon dupes, value brands, private label, and small firms continue to rely significantly on Chinese manufacturing and lack the bargaining leverage of larger corporations. According to Swartz, some department stores will also suffer from that since they depend on their private labels to draw in customers searching for less expensive options.
Speaking on condition of anonymity to avoid criticism of the company, an official at a family-run footwear company stated that he is anticipating a decrease in retailer orders after tariffs take effect. The New England-based company anticipates absorbing the costs for at least six months before passing them on to customers. It sells its branded merchandise to the majority of major U.S. shops and manufactures private-label footwear for some of the biggest chains.
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The executive claimed that it is challenging to create strategies because of Trump’s unpredictable nature. For shoe manufacturers, who frequently decide on their product lineup and pricing six to nine months in advance, this puts them in a particularly challenging position.
“Unfortunately, you really don’t know what’s coming, so we will have to be more reactive,” he stated. “With [Trump], it’s fire, ready, aim, so it’s always wait-and-see.”
In contrast to his election campaign proposals, Trump just said that he intends to raise taxes on Chinese goods by an additional 10%. U.S. importers already have to pay up to 25 percent tariffs on a variety of Chinese goods, which were implemented in 2018 during Trump’s first term. The president informed reporters on Monday that he was thinking of imposing 25% tariffs on imports from Canada and Mexico.
One of the six consumer product categories that will be most impacted by tariffs, according to the National Retail Federation, is footwear. Other items include clothing, toys, furniture, appliances for the home, and vacation gear. According to the trade group, shoppers will spend an additional $6.4 billion to $10.7 billion on footwear alone.
Trump has promoted tariffs as a means of pressuring producers to relocate their operations to the US. However, due to the United States’ “insatiable appetite for footwear,” shoe brands have limited options for responding to tariffs, according to Matt Priest, CEO of Footwear Distributors and Retailers of America. Gary Raines, the chief economist for the trade association, estimates that the nation imported 2 billion pairs of shoes in 2023, or about six pairs per person.
In an interview with The Washington Post, Priest stated, “We simply don’t have the capacity to produce that amount of footwear at the prices necessary to meet that demand.”
Analysts concurred. “It is absurd to think that this will lead to a significant increase in the production of footwear in the United States,” Swartz added. “It won’t happen now, and it didn’t happen during Trump’s first term.”
In a statement to The Post, Harrison Fields, the principal deputy press secretary for the White House, claimed that tariffs will “benefit American manufacturers and put America First.”
Michael Jeppesen, senior director of footwear brand Manitobah and strategic adviser at consulting firm Consensus, stated that it is impossible to maintain low prices due to labor costs in the United States. During a recent call with reporters, he stated, “A sneaker that costs $100 in retail from China would be closer to $200 if made in the U.S.”
According to the New England footwear executive, the company continued to manufacture its shoes in the United States until the mid-1990s, at which point it began to lose business to rivals who were able to offer lower pricing thanks to their overseas plants. According to the CEO, the company now believes that it is not feasible to move manufacturing back to the United States from China because, in addition to the fact that hourly wages in the United States are significantly more than those in China, meeting Occupational Safety and Health Administration regulations may be just as expensive as hiring new employees.
“I don’t think many people who shop at Target, Walmart, Kohl’s, Ross, Burlington, T.J. Maxx … can really afford that,” he remarked, referring to the possibility of producing shoes in America at a cost of $200 to $300 per pair.
According to Swartz, some businesses may distribute the suffering throughout their supply chain. If manufacturers don’t cut their prices, big brands may threaten to relocate their production to another nation.
Trump’s 2018 decision “poured an accelerant on that,” according to Priest, who noted that footwear businesses had begun diversifying their sourcing and production a few years prior. In 2009, 76 percent of the total value spent on footwear in the United States came from China, which accounted for 87 percent of the volume of footwear imports. About 58% of that volume was produced in China in 2024, and its proportion of the total value has decreased by more than half to 35%.
In a November earnings call, Christopher Hufnagel, CEO of Wolverine Worldwide, the business that owns Merrell, Chaco, and Saucony, stated that the company’s “exposure to China is down dramatically” to the mid-teens area, with a large portion of their production currently taking place in Bangladesh, Indonesia, and Vietnam. By entering Cambodia, Vietnam, Mexico, and Brazil, Steve Madden hopes to cut the percentage of imports from China—just over half—to 40 to 45 percent.
Not only shoes, though; a number of companies have increased their sourcing and production outside of China, including Ralph Lauren, Gap, Under Armour, William Sonoma, and Tapestry.
According to Priest, businesses can only take in so much. He stated that “all bets are off and price increases for consumers are inevitable” if the tariff increase exceeds 10 percent. “We hardly ever witness increases in footwear import prices that do not result in higher retail costs for consumers.”
Nevertheless, Swartz asserted that consumers have the final say: “Even if everyone has to raise prices, consumers will eventually just buy fewer shoes.” They just will continue to wear the same shoes till they are worn out and have holes in them.
Hello, I am Natasha Rose. I am the founder of the website Best Running Shoes. I am from California, USA. I am a professional shoe analyzer and an employee in a shoe showroom. I like to provide information about all types of shoes.
