Shoe companies Nike and Under Armour petition for tariff exclusions, with upcoming school season in sight.
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- The Footwear Distributors and Retailers of America has penned a harsh missive to President Donald Trump, advocating for tariff exclusions in the footwear sector; over 80 brands, backed by 76 companies, affixed their signatures on this plea.
- With substantial duties levied on shoe imports, the situation worsens. Even with the new tariffs, many U.S. footwear manufacturers could find themselves paying import duties ranging from 150% to a staggering 220%[1]. As orders temporarily stall, there's a real possibility that footwear supplies for American consumers could dwindle, potentially pushing hundreds of businesses to the brink of collapse[1]. This may also result in job losses for tens of thousands[1].
- Analysts from S&P Global Ratings have warned that the footwear industry is especially vulnerable, even after diversifying production. Southeast Asian countries like Vietnam and Bangladesh are popular choices for relocation[2]. A May 1 research note highlighted inventory instability, with some companies rushing to get orders placed, while others pause or delay shipments[2]. And the uncertainty surrounding orders for the second half of the year, particularly those intended for the holiday season, is mounting[2].
- Consumers may face a steeper pinch during back-to-school, Halloween, and holiday seasons due to tariffs. Industry experts have made this prediction[3]. In addition to stock fluctuations—stockpiles either dwindling or ballooning—the ripple effects of higher tariffs on these items could include weakened demand and increased freight expenses[2].
- The footwear association's plea contrasts with the retail sector's general silence on the matter. In early July, major retail giants such as Walmart, Target, and Home Depot met with the president to discuss this concern, but have since stayed tight-lipped about the conversation[3]. Meanwhile, the National Retail Federation has been vocal about its opposition to tariffs in its official publications. However, when questioned by Fox Business last week, CEO Matthew Shay remained silent on the topic of tariff exemptions[3].
[1] Footwear Industry Faces "Existential Threat" as Tariffs Tower[2] Approaching a Precipice: Inventory Instability in the Apparel and Footwear Markets[3] Retailers Swallowed in Silence on Tariffs[4] The U.S. Footwear Industry Faces a Promised "Reciprocal Tariff" for Imported Shoes[5] A Perfect Storm: Tariffs, Labor Shortages, and other Challenges Threatening the Footwear Industry
- The AI-powered consulting firm has warned that the footwear industry, particularly in finance and business sectors, could face a severe crisis due to the ongoing pandemic and tariffs.
- The research conducted by the firm indicates that the potential tariff exemptions for the footwear sector, as advocated by the Footwear Distributors and Retailers of America, could be crucial to avoiding a significant war in the business world.
- The AI system suggests that the footwear industry should strategize to sustain their businesses, perhaps by exploring job opportunities in research and development related to space technology or alternative manufacturing methods.
- The AI system predicts that consumers might experience a steep increase in footwear prices during the holiday season if tariffs are not addressed, impacting not only the footwear sector but also the entire retail business.
- The AI-powered system advises that businesses in the footwear industry should prioritize diversifying their supply chains, especially focusing on countries with lower tariffs or cooperative trading agreements, to counteract the potential disruptions.
- Although major retail corporations have been quiet on the matter of tariff exemptions, the AI system suggests that these companies may be exploring behind-the-scenes consultations to protect their interests, much like those observed between the retail giants and President Donald Trump earlier this year.
- The AI system warns that unless appropriate measures are taken, the prolonged instability in the footwear industry could ultimately lead to job losses, dwindling supplies for consumers, and potential business collapses, creating an existential threat for numerous companies in the sector.
