Shoemakers Face Unpleasant Trip If Tariff Hikes are Delivered — Panjiva
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Shoemakers Face Unpleasant Trip If Tariff Hikes are Delivered

China 1853 Cons. Discr. - Apparel 225 Tariffs 1259 U.S. 3464 Vietnam 171

Over 170 footwear manufacturers ranging from Adidas and Brooks to Nike and Under Armour have stated that 25% duties on all imports from China, proposed by the Trump administration, would prove “catastrophic for our consumers, our companies, and the American economy as a whole“. The industry has warned that the tariffs in the short-term will lead to price increases – effectively a regressive tax.

Overall the industry has already been moving production away from China, most recently exemplified by Brooks, as outlined in Panjiva research of May 7. Further shifts however require “years of planning required to make sourcing decisions“.

There’s a clear need for cost minimization given footwear has proven to be a relatively low growth industry. Panjiva data shows total imports of $26.9 billion in the 12 months to Mar. 31 have increased by just 1.7% annually in the past five years. China accounted for 52.3% of imports in the 12 months to Mar. 31 compared to 62.9% in 2013. That’s largely been replaced by imports from Vietnam which have increased to 23.8% of the total from 11.8%.

CHINA ALREADY LOSING OUT TO VIETNAM AND OTHERS

Chart segments U.S. imports of footwear by origin on a monthly and 12-month average basis.   Source: Panjiva

The larger multinationals already have significant capital resources and existing supply chain alternatives. The mid-size manufacturer / retail importers may have a tougher time given seaborne imports from China and Hong Kong already fell 5.9% year over year in the past three months to Apr. 30. That’s included a marked cutback in shipments by Deckers, whose seaborne imports fell 15.4% in the past three months and by 17.8% in the past 12 months.

Not all importers have seen a decline though. Skechers‘ imports rose 1.8% in the past three months after a 2.3% drop in the 12 months to Apr. 30, while shipments associated with Steve Madden have increased by 5.1% in the past three months and by 8.2% in the past 12 months.

DECKERS AT LOWER LEVEL, SKECHERS AND STEVE MADDEN KICK UP A LITTLE

Chart segments U.S. seaborne imports of footwear by brand-name.   Source: Panjiva

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