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The impact of U.S. tariffs on footwear

Views: 4     Author: Site Editor     Publish Time: 2019-09-11      Origin: Site

The impact of U.S. tariffs on footwear

 

       ---More than 200 us shoe companies have written to President trump demanding the lifting of tariffs on China

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The US announced further tariffs on 550 billion dollars of Chinese goods. For many industries in the United States, Chinese products are irreplaceable and the Chinese market cannot be abandoned. A group of 209 shoe companies from the footwear distributors and retailers trade association recently issued an open letter to the President calling on him to immediately stop imposing new import tariffs on Chinese consumer goods. These companies include Nike, Adidas, Converse, Birkenstocks USA and so on.

 

It is reported that at present, the tariff rate of shoes imported from China by the United States is 11%, and the tariff rate of some shoes will be as high as 67% after the further imposition of tariffs by the United States. Footwear is subject to tariffs of $3 billion a year. That's enough to buy 855 starbucks coffees for everyone in Manhattan. Eighty percent of children's shoes are made in China - and American families have even higher tariffs on shoes. The highest tariffs usually fall on lower-priced shoes and children's shoes, which will increase the cost of living for American consumers and working families. The letter calls for:  According to the national association of shoe distributors and retailers, the new tariffs will cost American consumers $4 billion a year and affect the Christmas season for tens of millions of Americans. What is more, Some government officials believe the tariffs are being paid by China, but not so easily in the retail sector. Because of higher shoe prices, U.S. consumers will pay more for shoes, and with limited disposable income, shoe companies will sell fewer shoes.

 

The U.S. sneaker market is worth $21.2 billion, according to Cowen Equity Research, and while sneakers have been replaced by President trump's latest duty list, many sneaker fans are wondering what the new tariffs will do to a booming industry. Thousands of consumer goods, from live eels and cranberries to electric lights and buttons, will be affected by the new 25% tariff. However, this is an item that does not contain many hypothetical "what-if" scenarios. However, matt priest, FDRA's President and chief executive, said the new tariffs, including on shoes, would have an "astonishing" impact on us consumers and the sports shoe industry ."Our high consumer costs mean we sell fewer shoes. "This could threaten jobs in our industry and could put American shoe companies out of business," he said.

 

The letter calls for: the trade war with China has created uncertainty in our industry, strangling U.S. economic growth and choking off capital investment in jobs, infrastructure and technology, while our customers face higher prices, On behalf of American footwear consumers and hundreds of thousands of employees, we ask you to immediately end the footwear tariff increase. Manufacturers and retailers said: "the tariffs are a hidden tax imposed by the us government on its people, not paid by China, but by us consumers."

 

On May 20, the association, together with 173 footwear manufacturing, manufacturing and distribution companies including adidas and Nike, sent a joint letter to trump, calling on the United States to stop imposing tariffs on Chinese footwear imports.

 

The American media noted that New Balance was not included in the letter. Jim Davis, the chairman of New Balance, donated about $400,000 to Mr Trump's campaign. However, the company has spoken out against the tariffs on other occasions.

 

Matt priest, President of the national footwear wholesalers and retailers association, said in a statement that imposing tariffs on Chinese imports would only lead to "higher prices" and "fewer jobs" for Americans. Rick Helfenby, President of the national association of apparel, footwear and footwear manufacturers, told the media: "the U.S. government is waving the big stick of tariffs around.

 

Higher tariffs are also good for America. It can protect local manufacturing. But the disadvantages outweigh the advantages, companies such as Nike, Under Armour and puma have been steadily reducing their dependence on China and shifting resources to places such as Vietnam. Still, the U.S. imported $11.4 billion worth of Chinese footwear last year, according to the U.S. census bureau, and the U.S. footwear industry still relies on a skilled Chinese labor force. Nike, for example, made 47 percent of its shoes in Vietnam in 2018, compared with 26 percent in China and 21 percent in Indonesia, according to its latest annual report. .An adidas spokesman said Vietnam is the company's biggest buyer, sourcing 42 percent of its products. According to SEC filings, the company's share of the Chinese market fell 1 percent in 2018 from 2017.Under Armour said 87 per cent of its footwear in 2018 was produced by the five largest contract manufacturers, mainly in China, Vietnam and Indonesia. Matt Priest points out that discount retailers like Wal- Mart are still particularly dependent on China for their footwear production: "a 10 percent tariff would be a lot of trouble, especially for companies serving low-cost customers." In addition, it will be harder for companies like Wal- Mart to absorb tariffs in their supply chains, so consumers will have to bear more of the burden. Wal-   mart declined to comment. Meanwhile, another impact of the new tariffs could be more footwear bankruptcies. The industry has had a tough time. Payless ShoeSource, for example, was a popular wholesale channel for many shoe brands but filed for bankruptcy in February and closed all 2,500 stores. About Nine WesBrands such as t. Rockport and The Walking Co. filed for bankruptcy in 2002. Shoes are not immune to the growing number of consumers buying shoes online or on sites like Zappos. Rick Helfenbein, chief executive of the American Apparel and Footwear Association, told CNBC's Closing Bell on Thursday: "in the short term the retail situation will be very bad. We have nowhere to run because it is impossible to move so many goods in a short time. The trump administration's message is out of China. The problem is, we can't move the chain as fast as they want. So we have to persevere and fight it.

 

Ultimately, economic development is a win-win game, but geopolitics is not. Hopefully, this review will guide you to footwear information.


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