More than 170 shoe companies have penned a letter urging President Donald Trump to remove footwear from his latest tranche of tariffs.
Last week, the Office of the U.S. Trade Representative released a list of Chinese goods that could be saddled with a proposed 25% hike in duties, with footwear among the targeted products.
In response, major footwear companies including DSW, Foot Locker and Wolverine Worldwide signed on to the memo, which was addressed to the president himself, outlining the impact that the new import tax would have on businesses and working-class Americans. (The tariffs would weigh on top of current duty shoe rates, which average 11% and go up to 67.5%.)
“As an industry that faces a $3 billion duty bill every year, we can assure you that any increase in the cost of importing shoes has a direct impact on the American footwear consumer,” the letter read. “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.”
According to the Footwear Distributors & Retailers of America, which released the letter today, each U.S. family would have to spend an extra $131.93 on footwear annually should the threatened tariff increase take effect. It added that consumers overall would pay $7 billion in additional costs each year for shoes.
Other companies that endorsed the memo include Adidas America, Aldo US, Camuto Group, Caleres, Deckers Brands, JCPenney, Nike, Reebok, Sam Edelman and Ugg. In the letter, the FDRA said that this was the largest number of shoe companies to unite around a common issue.
“I am so proud of how our industry has unified and is working together to fight the president’s 25% additional import tax on shoes,” said FDRA president and CEO Matt Priest. “They are fighting hard for their workers and for their customers, because if this goes through, it will be catastrophic to our industry and every American family.”
Ten days ago, Washington imposed an increase in levies from 10% to 25% on $200 billion worth of Chinese products, leading Beijing to retaliate with new tariffs of 5% to 25% on $60 billion of U.S. goods. Trump had also ordered U.S. Trade Representative Robert Lighthizer to begin the process of raising duties on nearly all remaining imports from China, valued at approximately $300 billion.
On the heels of the news, the U.S. stock market opened lower at the start of the week on renewed fears over escalating tariff tensions between the world’s two largest economies.
The Dow Jones Industrial Average dropped more than 100 points, or 0.5%, on Monday morning, while the S&P 500 lost 0.7% and the Nasdaq Composite fell 1.8%. Walmart Inc. and Macy’s Inc. also kicked off the day in the red, with both retailers announcing in the past week that the trade war could drive up costs for shoppers.
The memo comes ahead of a big earnings week for retailers, with Kohl’s Corp., J.C. Penney Inc., VF Corp. and Target Corp. among the companies set to report first-quarter sales and profits within the next couple of days. Footwear and athletic leaders Shoe Carnival Inc., Deckers Outdoor Corp., Foot Locker Inc. and Hibbett Sports Inc. are also expected to post their earnings numbers this week.
source: Yahoo! Lifestyle (Footwear News)