Yesterday, more than 170 shoe companies and retailers, including Nike, Foot Locker, and Under Armour, warned in an open letter to President Donald Trump of “catastrophic” consequences if new proposed tariffs on some US$300 billion in Chinese goods takes effect. Footwear companies already pay some of the highest duties, so the industry is close to united in its opposition.
Tariffs are paid by domestic companies, which often pass the cost to consumers in the form of higher prices. According to CBS, the Footwear Distributors of America estimate the new tariffs could cost American consumers US$7 billion a year.
According to the Footwear Distributors and Retailers of America, here’s an estimate of how much more shoes could cost American consumers if Trump moves ahead and imposes the new duties:
The road to less reliance on China
Footwear companies that signed the letter to President Trump have different levels of dependence on China.
According to Bloomberg, Nike made about a quarter of its footwear and apparel in China during its 2018 fiscal year. Puma made 24% of its goods in China, but 32% in Vietnam. Skechers USA makes roughly 65% of its products in China, but only some is imported to the US. Under Armour gets about 18% of its products from China — down from 46% in 2013, and its goal is to cut it to 7% by 2023.
What are your thoughts on Trump’s China tariffs? Leave a comment below.
Read more: All the reactions on Twitter about the Facebook, Instagram and Whatsapp outage