President Donald Trump and the US government continue to skirmish with China in a trade war that has seen tariffs raised to 25 percent on around $200 billion worth of Chinese goods. This might not sound like it has much to do with sneakers or those who buy them, and President Trump insists China will be footing the bill for increased prices.

However, speaking to Highsnobiety, market analyst Matt Powell says, “The greatest misconception is that China is paying the tariffs. This is a lie. The American consumer will be paying the tariff. Tariffs are taxes on the consumer.”

Powell’s sentiment is echoed by others, including White House economic advisor Larry Kudlow, who told Fox News Sunday, “In fact, both sides will pay.” With a 25 percent tax slapped on Chinese-made consumer goods, US importers will be the ones who pay — and businesses could pass that additional cost on to American consumers.

Finished consumer goods such as sneakers were previously left off the list of products to be hit by increased tariffs as the trade war heated up, but with the bump to 25 percent this month, the Trump White House has decided to tax almost all remaining imports (valued at approximately $300 billion), sneakers included.

The decision has the sneaker industry and experts reeling at the possible impact. Matt Priest, president and CEO of the Footwear Distributors and Retailers of America (FDRA), told Yahoo Finance, “Higher costs for our consumers means we sell less shoes. This threatens jobs in our industry and could put US footwear companies out of business.”

Priest isn't alone. President and CEO of the American Apparel & Footwear Association Rick Helfenbein told CNN he is “beyond freaked.” In this video, he compared the new tariffs to tariffs from 1930 that Helfenbein claims resulted in “98 percent of apparel and footwear being imported into the United States.”

Powell believes companies will have to pass at least some of the additional cost on to shoppers. “Brands will try to absorb as much of the increase as they can, but the bulk of the increase will have to be passed on to the consumer,” he says. “The prices of shoes made in China will go up due to the tariffs. Brands that are more dependent on China will be hurt the most.”

Just how much the price of sneakers could change was recently estimated by the FDRA. The figures, first reported by Footwear News, are based on the “landed cost” of the imported shoe. This includes the price of producing and shipping the shoe, which is then multiplied by three — a standard retail markup — to account for costs such as warehousing, marketing, transit, labor, and the profit margin.

A sneaker that costs around $48 at retail, with a landed cost of $14.60 and a tariff of 14.1 percent, would cost $60.93 with the additional 25 percent duty. And those higher prices for goods are expected to bite over time. Last year, the American Apparel & Footwear Association estimated that the additional 25 percent could cost a family of four an extra $500 on their typical annual purchases.

When asked whether the trade war with China will prompt companies to make changes to their supply chain and even bring production back to the US, Powell wasn’t convinced. “Labor costs in the US are far too high to be competitive with Asia," he says. "Higher tariffs will not result in footwear manufacturing moving to the US.”

What To Read Next

  • Image on Highsnobiety

    adidas Joins Palace's Spring Collaboration Line-Up

    Sneakers
  • Image on Highsnobiety

    In the Kardashian Football Chronicles, Saint West Is a Gunner

    Culture
  • Image on Highsnobiety

    20 Swedish Brands Every Highsnobiety Reader Should Know

  • Image on Highsnobiety

    10 Luxury Gifts for Special V-Day Lover

    Style
  • Image on Highsnobiety

    Can New Balance's 610 Be Its Next 990?

    Sneakers
  • Image on Highsnobiety

    AGR's Creating Its Kaleidoscopic World One Knit At A Time

    Style
*If you submitted your e-mail address and placed an order, we may use your e-mail address to inform you regularly about similar products without prior explicit consent. You can object to the use of your e-mail address for this purpose at any time without incurring any costs other than the transmission costs according to the basic tariffs. Each newsletter contains an unsubscribe link. Alternatively, you can object to receiving the newsletter at any time by sending an e-mail to info@highsnobiety.com

Web Accessibility Statement

Titelmedia (Highsnobiety), is committed to facilitating and improving the accessibility and usability of its Website, www.highsnobiety.com. Titelmedia strives to ensure that its Website services and content are accessible to persons with disabilities including users of screen reader technology. To accomplish this, Titelmedia has engaged UsableNet Inc, a leading web accessibility consultant to help test, remediate and maintain our Website in-line with the Web Content Accessibility Guidelines (WCAG), which also bring the Website into conformance with the Americans with Disabilities Act of 1990.

Disclaimer

Please be aware that our efforts to maintain accessibility and usability are ongoing. While we strive to make the Website as accessible as possible some issues can be encountered by different assistive technology as the range of assistive technology is wide and varied.

Contact Us

If, at any time, you have specific questions or concerns about the accessibility of any particular webpage on this Website, please contact us at accessibility@highsnobiety.com, +49 (0)30 235 908 500. If you do encounter an accessibility issue, please be sure to specify the web page and nature of the issue in your email and/or phone call, and we will make all reasonable efforts to make that page or the information contained therein accessible for you.