The prospect that Donald Trump could become the next U.S. president is changing how international trade could unfold in China, which is the biggest manufacturer of shoes imported into the United States.
Trump has said that if he wins the November presidential election, he might impose a 60 percent tariff on all goods imported from China and a general 10 percent tariff on all other imported goods.
“That idea is obviously driving a lot of interest from our members about how to bring in product maybe prior to these decisions being made to push up duties,” said Matt Priest, the president and chief executive of the Footwear Distributors and Retailers of America, which represents some 500 footwear companies. “This would obviously affect costing and our consumers, who ultimately pay the price on those duty.”
As it stands now, 99 percent of the shoes sold in the United States are imported from primarily China, Vietnam and Indonesia. With the U.S. footwear industry bringing in 2.5 billion shoes a year, it already pays $4 billion a year in tariffs. “We are the poster child of how tariffs did not keep domestic production in place,” Priest said.
Priest was the guest speaker at a Port of Los Angeles webinar on Wednesday discussing monthly container traffic statistics at the gateway where two-thirds of U.S. shoe imports arrive.
If Trump does win the election, Priest is prepared to lobby for lower tariffs on Chinese-made shoes. “We have a record of policy decisions behind us that help inform us on how to best navigate that [tariff] scenario for us as an industry,” he said.
In the end, it is the consumer who pays for tariffs with increased footwear prices. Lately, Priest said the industry has seen purchasing power softness from households making under $100,000 a year. These families are being challenged when buying shoes for the back-to-school season. “Footwear is kind of the barometer of the overall health of the economy because people need to buy shoes,” Priest said.
Still, footwear manufacturers are anticipating a strong holiday season, bringing in goods a little earlier than normal to avoid higher shipping rates and not being surprised by unexpected seasonal spikes seen in previous years. Following the COVID-19 pandemic, when many factories were shut down, there was a surge of imports that came into Los Angeles and other ports. Los Angeles and its sister port in Long Beach saw ships stacked up beyond the breakwater, with 109 container vessels in early 2022 waiting to find a dock.
Gene Seroka, the executive director of the Port of Los Angeles, said the shipping gateway now is operating at 75 percent to 80 percent of capacity, which means there is plenty of room to handle more cargo efficiently if shipments are diverted from East Coast ports, where longshore workers are hashing out a six-year contract expiring Sept. 30. “Since last November, importers have been talking about shifting volume to Los Angeles because of various issues,” the executive director said.
Other issues include Yemen Houthi rebel attacking ships sailing through the Red Sea and a drought in Panama, making it slower and costlier to sail through the Panama Canal. Some ships headed from Asia to Europe and the U.S. East Coast are having to sail around the Cape of Good Hope in Africa to avoid the Red Sea. “Shippers are adding 10 to 14 days in transit,” Seroka said. “We’re hearing reports that it’s a million dollars more for fuel costs per vessel because of the transit time.”
