FDRA’s Matt Priest Says Trump’s Additional 10% Tariff on China Would Be ‘Catastrophic’ for Some Shoe Companies
An already anxious footwear industry is reeling after President Donald Trump’s revelation on Thursday that he would hike China tariffs again.
Trump said he planned to implement an additional 10 percent tariff on Chinese imports to the United States starting Tuesday, on top of the 10-percent tariffs imposed this month.
“There’s going to be tons of difficult conversations with retailers and factories and brands over the coming weeks, particularly if this Tuesday threat moves forward, which we anticipate it will,” said Matt Priest, president and CEO of the Footwear Distributors and Retailers of America. “It’s just going to be a really challenging environment if you’re an importing company.”
Across the supply chain, there’s going to be a “standoff” about who can absorb the higher costs, according to Priest. Ultimately, inflation-wary consumers will be facing higher prices, and some of them will scale back on purchases or shelve them altogether. This week, Coresight Research predicted that U.S. retail sales would decelerate slightly in February and March — and that’s before any new tariff impact.
“Retailers are seeing the down foot traffic and the decline in sales, and they’re getting nervous about being in a position to have to raise prices,” Priest said.
The tariff conversation has dominated every recent earnings call. This week, Steve Madden CEO Ed Rosenfeld issued a cautious outlook for 2025.
“Most notably, earnings will be negatively impacted by new tariffs on goods imported into the United States and by our efforts to aggressively diversify production out of China,” he told investors.
Meanwhile, China responded to Trump’s new threats with some of its own — vowing to retaliate as necessary.
“China urges the US not to repeat its mistakes and to return to the correct path of resolving disputes through equal dialogue as soon as possible,” a ministry spokesperson said in a statement Friday.
Priest said that while reciprocal tariffs from China likely wouldn’t impact the footwear industry in a notable way given that the U.S. doesn’t export a high volume of shoes to the country, there’s really “nowhere to hide” at the moment.
“[The administration] is going to go after countries like Vietnam, India, Indonesia and others. They’re really looking to create a landscape where they’re trying to jack up tariffs and develop more domestic manufacturing,” Priest said. “We know this isn’t going to work. And the consumer is pretty astute to it.”
A recent FDRA study — conducted before Trump’s announcement this week — showed that 82 percent of U.S. shoppers (including 89 percent of Democrats, 83 percent of independents and 76 percent of Republicans) believe Trump’s proposed tariffs will contribute to price hikes at popular stores.