How a Second Trump Term Could Impact Footwear: Taxes, Tariffs, Trade and More

The retail and footwear industries are beginning to take stock of how a second Trump administration could impact their businesses.

In the wake of Donald Trump’s win over Kamala Harris, trade groups and experts voiced their desire to work with the president-elect to improve the issues currently plaguing retailers and consumers, such as high costs, tariffs and restrictive trade policies.

“Inflation was clearly a motivating factor in yesterday’s election results, with many middle-class voters expressing deep concern about the impact inflation has had on family budgets,” said Brian Dodge, president of the Retail Industry Leaders Association, in a statement on Wednesday. “Policymakers should hear their concerns loud and clear as debates on taxes and tariffs take center stage. Retailers are hopeful the incoming Trump Administration and Congress take a strategic approach to international trade, with policies that shield families from higher prices on consumer goods.”

When it comes to footwear, shoe prices are expected to see an overall rise by the end of 2024 for the fourth straight year, according to the Footwear Distributors and Retailers of America (FDRA). Part of this price surge has come from tariffs on foreign goods (footwear imports 99 percent of its shoes from China, Vietnam and Indonesia). Looking ahead, Trump’s proposed tariff plans include a 10 to 20 percent tariff on imports from all foreign countries and an additional 60 to 100 percent tariff on imports specifically from China. In a study released this week, the National Retail Federation warned U.S. consumers could pay between $6.4 billion to $10.7 billion more for footwear a year with the suggested tariffs.

“The supporters of the president-elect are very concerned about their pocketbooks,” FDRA president and chief executive officer Matt Priest told FN. He noted that FDRA will work on educating the new administration about different options to keep the industry competitive while keeping costs lower for consumers.

“Encouraging the administration not to add taxes on goods for American people is probably a really good place to start if you want to ensure that the prices stay low,” he said.

Steve Lamar, president and chief executive officer of the American Apparel and Footwear Association (AAFA), also warned of the inflationary impact that additional tariffs could have on the footwear industry and consumers at large. In a statement, Lamar said AAFA will work with Congress on a revived trade agreement and other programs to diversify and invest in the industry and create more American jobs.

“We also look forward to initiatives to protect our shipping channels and ports, put a stop to the influx of counterfeit goods across third-party e-commerce platforms, and drive other policies that are not just well-meaning but well-crafted, implementable, practical, harmonized, and ultimately – successful,” Lamar said.

According to Neil Saunders, managing director of GlobalData, Trump will likely renew his 2017 tax cuts that were meant to expire at the end of 2025, which could help bolster consumer spending and in turn have a positive impact on the retail industry. Trump has also indicated a desire to cut corporation taxes to possibly 15 percent, which “would be beneficial to retail earnings and will also facilitate retail investment,” Saunders said.

And as it relates to mergers and acquisitions, Saunders said that Trump’s administration is generally more interested in corporate dealmaking than the prior administration.

“This does not necessarily mean that big deals like Kroger-Albertsons will be waved through, but it does mean others like Tapestry-Capri will receive a far warmer reception than they have under the Biden administration,” Saunders said. “However, it needs to be noted that Trump is not a free-marketeer and that some political overtones, including a slightly anti-big tech bias, may remain in regulatory politics.”