Footwear Industry Concerns Over Trump's Tariffs and Consumer Spending

Footwear Industry Concerns Regarding Tariffs

• 😟 Matt Priest expresses significant concern from footwear industry members following the announcement of new tariffs.
• 💡 While encouraged by the call between the US President and the Vietnamese head of state, the primary focus for members is costing goods in a challenging economic environment.
• 📈 87% of executives surveyed reported seeing economic headwinds, a number expected to rise to 100% after the recent tariff announcement.

Impact of Tariffs on Footwear Costs

• ⚠️ Tariffs announced in the Rose Garden are on top of existing duties, leading to significantly higher costs.
• 👟 A pair of sneakers from Vietnam currently facing a 20% duty could see that jump to 46%, and potentially 66%.
• 🇨🇳 Goods from China could face duties north of 100%.
• 📉 These high duty levels are seen as detrimental, taking money from American businesses, hurting American jobs, and driving up prices for consumers.

Reshoring and Input Costs

• 🏭 The idea of reshoring footwear production is discussed, but the administration is also taxing inputs, materials, and machinery needed for US production.
• 🚫 This makes reshoring not a viable option as it would increase production costs.
• 🚗 Similar issues are observed in other manufactured goods like automobiles and RVs.

Consumer Spending Trends

• 📉 Footwear retail experienced over 14% growth year-to-date before the inauguration.
• ⚠️ In the 10 weeks since the inauguration, retail has seen an 11-point drop.
• 🛒 Consumers are described as nervous and holding back, playing the "long game" with their spending due to inflation.