76 major shoe brands, including Nike and Adidas, warn that reciprocal tariffs “threaten the survival” of the industry and want an exemption.
This week, the Footwear Distributors and Retailers of America (FDRA) sent a letter to the White House, asking to be exempted from the reciprocal tariffs proposed by President Donald Trump. According to FDRA, these tariffs are posing an “existential threat” to the footwear industry. The letter, dated April 29, was signed by 76 footwear brands, including Nike, Adidas, Skechers and Under Armour.
“Many companies that produce affordable shoes for the working and middle class cannot afford such high tariffs. Nor can they pass on the costs to consumers. Without immediate reciprocal tariff exemptions, they will have to go out of business,” the letter said.
The association also warned that many orders have been delayed. Shoe inventories for American consumers could soon run out.
On April 9, US President Donald Trump announced high reciprocal tariffs on dozens of trading partners. However, just half a day later, he announced a 90-day delay for most economies, with China alone having its tariffs raised to 125%. Currently, almost all of America's trading partners are subject to a common 10% tax when exporting to the US. Among them are many countries that are important suppliers for the footwear industry, such as China, Vietnam, and Cambodia.
Adidas warned this week that the above tariffs would increase the price of shoes for US consumers. In late March, before the US President announced the reciprocal tariffs, Nike's CFO also predicted that quarterly revenue would decline due to tariffs and economic instability. Nike produces about half of its footwear in China and Vietnam. Of which, output from factories in Vietnam accounts for 25%.
According to the letter, before Mr. Trump announced the new series of tariffs, the US footwear industry was already facing high tariffs on products such as children's shoes. In total, footwear companies here will have to pay import taxes of 150-220%, according to the association's estimates.
"This is an urgent situation that requires immediate action. The US footwear industry cannot quickly adjust its business model and supply chain in the context of being subject to such unprecedented tariffs," the letter said.
The association also warned that these tariffs will not be able to bring production back to the US as Mr. Trump promised. They believe that they will only destroy the stability needed for businesses to invest in changing supply sources.
(according to CNBC)