A group of 173 footwear companies, including Adidas, Converse, Foot Locker, Hush Puppies, Nike, Puma, Reebok, Ugg and Under Armour, have requested US President Donald Trump immediately remove footwear from the list of imported products to be tariffed from China.
According to a joint statement released by the businesses, Trump’s additional 25 per cent tariff on footwear would be “catastrophic” for consumers, companies in the industry and the American economy as a whole.
“Any increase in the cost of importing shoes has a direct impact on the American footwear consumer,” the statement reads.
“It is an unavoidable fact that as prices go up at the border due to transportation costs, labor rate increases, or additional duties, the consumer pays more for the product.”
The Footwear Distributors and Retailers of America (FDRA) association estimated that the proposed change in import costs would add US$7 billion in additional costs to be picked up by the consumer per year.
According to the statement, the proposed tariffs would be placed atop of tariffs that already affect the industry, in some cases causing some customers to pay nearly 100 per cent duty on their shoes.
“This is unfathomable,” the statement reads.
“On behalf of our hundreds of millions of footwear consumers and hundreds of thousands of employees, we ask that you immediately stop this action to increase tax burden… It is time to bring this trade war to an end.”
Footwear retailers and brands are not the only ones making statements about the effect Trump’s tariffs are having on their businesses. Walmart last week warned the tariffs are already hurting its furniture segment, and will hit its clothing and accessories segment next.
Macy’s also warned that its furniture category has been impacted by the trade war.
According to Reuters, Morgan Stanley analysts have warned that a collapse of the ongoing trade talks between China and the US, and longer lasting tariffs on trade between the two countries, would “mean that we might not be able to avert the tightening of financial conditions and a full-blown recession.”