Shoe Sellers In St. Louis Fear Tariffs Will Drive Up Prices | St. Louis Public Radio

Shoe Sellers In St. Louis Fear Tariffs Will Drive Up Prices

Jun 27, 2019

President Donald Trump’s proposed 25% tariff on an additional $300 billion worth of Chinese goods will have a big impact on the footwear industry, which relies on the country for a majority of its products.

Such tariffs would hit home in St. Louis, where shoe manufacturing and sales have a long history. Caleres, formerly Brown Shoe Company, is based in Clayton, and many smaller independent companies call the region home.

St. Louis-based Hoy Shoe Company manufactures about 97% of its leather sandals in China. If the tariffs go into effect, President Scott Downs said he’ll have no choice but to pass on the cost to the consumer.

“It impacts us a lot, because we’re putting out our prices for next year right now,” he said. “So we have to put out a price list and say prices are subject to change.” 

He’s also worried that higher prices might lead to consumers buying fewer pairs of sandals.

“People are used to going in and buying two or three pair,” Downs said. “Maybe they’ll only buy one, maybe they wouldn't buy any.”

Collectively, Americans are anticipated to pay $2.5 billion more for footwear due to the tariffs, according to a consumer impact report released earlier this month by the National Retail Federation.

David French, senior vice president of government relations for the trade association, says smaller retailers and manufacturers are likely to be hit hardest because they have fewer options when it comes to redirecting their supply chains and absorbing extra costs.

“These tariffs are going to have a real impact on footwear prices in the U.S., because there just isn't the capacity in the U.S. to manufacture the same amount of footwear at the same price points,” he said. 

Over the past five years, many businesses in the footwear industry have begun moving their operations to Vietnam, Thailand and other countries. Mark Waldman, president of Laurie’s Shoes, says that means the impact won’t be as intense as it would have been otherwise.

With tariffs in mind, Waldman says he’ll be extremely conscious about how he prices his products and which manufacturers he buys from. Only about 35% of his assortment, mostly athletic shoes, comes from China, so he doesn’t anticipate raising prices much.

“[Manufacturers] can’t respond and pass the whole thing on to the consumer. You just don’t alienate people like that,” he said. “There is a lot of thought that goes into this.”

Waldman hopes trade tensions will diffuse this weekend when Trump and Chinese President Xi Jinping meet at the G-20 summit in Japan.

The proposed tariffs could also mean higher prices on items like strollers, diapers, clothing, toys and TVs. Over the past week, major companies such as New Balance and Best Buy testified on Capitol Hill, arguing that there should be carve-outs for industries that can’t easily source elsewhere.

The new tariffs would be in addition to existing tariffs on $250 billion worth of Chinese goods, ranging from furniture and textiles to frozen fish and almonds.

Follow Corinne on Twitter: @corinnesusan

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