Shoe Execs Uneasy About Trade Policy Ahead of Presidential Election
Tariffs and trade policy were the top concerns for U.S. footwear executives in the third quarter, according to a new survey released today by the Footwear Distributors and Retailers of America (FDRA).
FDRA’s Q3 2024 Footwear Executive Business Survey shows a record number of executives see government actions on tariffs, taxes, and trade as the most salient issues that could determine their company’s business over the next six months. The data comes as the U.S. prepares for a November presidential election that could have a significant impact on the industry regardless.
For example, Donald Trump has said he may impose a 60% tariff on all imports from China and a 10% tariff on all other imports if he wins the November presidential election. Kamala Harris’ tariff policy, on the other hand, is expected to continue President Joe Biden’s policies, including retaining the onerous Section 301 tariff rates.
Currently, 99% of shoes sold in the U.S. are imported, primarily from China, Vietnam, and Indonesia. The U.S. footwear industry imports 2.5 billion pairs of shoes annually and already pays $4 billion in tariffs annually.
"Our third quarter footwear executive survey reflects both optimism and challenges facing the footwear industry," said Matt Priest, president and CEO of FDRA, in a statement. "With trade policy looming in a presidential election year and consumer behavior in flux, our members are ready to navigate these uncertainties. FDRA will continue to provide the tools and insights they need to succeed."
Despite government uncertainty, footwear executives were generally optimistic about economic and business health forecasts for the next six months. More than half of respondents said their business had higher sales than six months ago, and half said they expect better sales over the next six months. Nearly 75% of respondents said they expect higher sales over the next 12 months.
Executives were less optimistic about footwear price forecasts, however, with lower inventory and higher landed costs implying higher retail footwear prices in the future. 27% of respondents said they expect footwear prices to increase over the next six months, the highest percentage in the survey in more than a year.