US trade war with China will turn against American shoe market
27.05.2019 2018

US trade war with China will turn against American shoe market

Despite Trump's calls for American shoe brands to leave China, for many of them there is no alternative to Chinese production, writes Footwearnews. com.

US President Donald Trump intends to increase tax on the import of shoes from China to the United States. The tariff can grow from the current 11,3% to 25%. This increase can significantly affect the shoe industry in America, since currently imports in the US footwear market are about 98%, China accounts for 70% of the volume of shoes sold in the United States. 

On his Twitter, American President Donald Trump urges brands to leave China if they want to avoid raising the tariff - “Make your product at home, in the USA, there are no tariffs” “You can also buy goods in a non-tariff country, not in China.” 

However, a significant portion of footwear and infrastructure professionals today are outside the United States. “For example, to produce sports shoes, we need to use more than 20 of different factories, definitely more than a dozen,” says Sabrina Finlay, head of the American shoe company Otabo. - Part of the processes we could produce in China, part in the USA, part in Europe to get the finished product. Closing the primary assembly factory in China is not a solution. ” 

Otabo practices the so-called "co-production", working closely with a network of factories around the world and linking them with the brands with which it works. According to Finlay, at an American plant, she was convinced firsthand how valuable the international supply chain was.

“We believe that this is the future. US production is growing due to international cooperation, ”she says. 

The shoe industry in the United States has become one of the most ardent opponents of tariff increases, since taxes on shoe imports in the country are already quite high. Existing fees average 11% and in some cases reach 67,5%. 

Several major shoe manufacturers, including Nike, Adidas, and Puma, have managed to move some of their products to Vietnam and other countries over the past few years, driven by rising labor costs in China. Apparently, this trend will continue in the near future due to the persistence of uncertainty in the global world and price wars. 

However, such a transfer requires significant investments in infrastructure and staff training, which most small shoe brands will not be able to master. These companies will feel the brunt of raising import tariffs and will be forced to raise prices for their products.

So, according to the estimates of American retailers and distributors of shoes, the introduction of 25% of the tariff on imports of shoes from China could increase the cost of American consumers by $ 7 billion per year.

Despite Trump's calls for American shoe brands to leave China, for many of them there is no alternative to Chinese production, writes ...
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