President-elect Donald Trump’s plans to renegotiate America’s international trade deals could have a negative impact on the U.S. sneaker market, according to a respected market research company.
The company claims that tough restrictions on China, which accounts for 66 percent of annual U.S. footwear imports, and Vietnam, another country sneakerheads will have noticed alongside the “Made in..” label inside their kicks, would keep prices high and could even dissuade people from buying new pairs. That would spell bad news for companies like Nike and Under Armour, for example, which have both had a rougher year financially than they would’ve have liked.
NPD Group analyst Matt Powell, who tracks the U.S. footwear industry, wrote in a November 10 note: “While the GOP has traditionally been a party to support free trade and international trade deals, Trump’s position was for renegotiating the terms of key deals and he widely supported tougher trade terms with China – the nation’s top sourcing market. Any change between U.S. and China trade relations is likely to impact the footwear industry.”
Trump was notoriously anti-Chinese trade throughout his campaign, and was staunchly opposed to the Trans-Pacific Partnership, or TPP — a pact that aims to deepen economic ties between 12 nations, slashing tariffs and fostering trade to boost growth. Republican lawmakers have said the deal will not pass Congress.
“If the tariffs are eliminated or reduced under TPP, this increases the likelihood that footwear costs would be lowered and therefore retail prices could go down without sacrificing margin. Brands and retailers would sell more shoes and consumers would get a better deal,” Powell added. “By keeping tariffs in place, however, it’s likely that prices would stay high and consumers may be more inclined to purchase fewer shoes.”
While there are bigger and more important things to worry about in the current political climate, it doesn’t look promising for sneakerheads. Read the full story over at Fox Business.
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