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Shoes are hotfooting it out of China

China makes about 90% of the shoes worn in America. Donald Trump's tariffs could end that:

The American shoe company Steven Madden will cut nearly half of its China production within the next year as it braces for tariffs under a second Trump administration.

....[CEO Edward] Rosenfeld said on Thursday that Steven Madden had been working for several years to build up a factory base outside China in places like Cambodia, Vietnam, Brazil and Mexico.

Even if Trump follows through, it won't benefit American shoemakers. There aren't any. We'll still import all our shoes, we'll just import them from other countries.

Will China retaliate if Trump raises tariffs? Maybe, but their leverage is limited. We don't export much to them, and their only truly strategic exports to us are pharmaceuticals and rare earth metals. Restricting those could do real damage, but even that would be temporary. Pharmaceuticals would migrate to India or other countries that already have good supply chains, and there are plenty of rare earths outside China. We just have to build the mines to get at them.

Of course, China also sells us lots of consumer goods that may not be strategic but will suddenly cost more if they're hit by big tariffs. Nobody seemed to care much about it during Trump's first round of tariffs, but that might be because the impact was swamped first by the pandemic and then the broader surge of inflation. It might be different this time. We'll see.

40 thoughts on “Shoes are hotfooting it out of China

  1. OrdoSeclorum

    There are LOTS of great shoes made in America.

    Alden are fantastic and they're made in Massachusetts.

    Rancourt and Quoddy are produced in Maine.

    Red Wing boots are in Minnesota and Thorogood in Wisconsin, as is Russel Mocccasin.

    Truman Boots and Wesco are made in Oregon. White's and Nick's Boots in Spokane Washington.

    Oak Street Boots are made somewhere in the U.S.

    Not many of those manufacturers are cheap. But they are thriving because the quality of the product is so high. All of them use leather tanned in Illinois or Wisconsin too.

    1. Josef

      Americans love cheap prices. Quality doesn't often enter the equation. Besides most popular brand sneakers are very expensive despite being made overseas in places like China.

    2. cephalopod

      I've been wanting a pair of Sven clogs and I already own Steger Mukluks for winter (two more Minnesota shoe companies), but most Americans are absolutely not used to paying $250-400 for a pair of shoes.

      Even if companies are able to shuffle their manufacturing around Asia, it will likely raise prices. And it won't just be shoes, meaning people will start to feel the price increases as broad-based inflation.

    3. Jasper_in_Boston

      There are LOTS of great shoes made in America. Alden are fantastic and they're made in Massachusetts. Rancourt and Quoddy are produced in Maine.

      This.

      The way to compete with cheap imports is to focus on quality, not price. There are indeed lots of great products of every type made in the USA. And many consumers will pay more for that quality. I do myself on occasion.

      But we should remember that not everyone can afford $300 dollars for a pair of shoes. So, while we should celebrate the success of US manufacturers of high quality, premium products, we also need to have lower priced products available, too. And that means an openness to trade. Otherwise living standards will suffer, as I fear a lot of Trump voters are about to find out.

  2. SnowballsChanceinHell

    "We'll still import all our shoes, we'll just import them from other countries."

    Just not from the revanchist totalitarian dictatorship that recently engaged in massive ethnic cleansing? Sad.

    1. aldoushickman

      Well, if Trump were threatening China with tarriffs unless it shaped up its record on human rights abuses and/or adopted democratizing reforms, that would be one thing (and maybe even a good thing! If defly done and pursued as part of a careful and well-thought out diplomatic multilateral effort, which of course Trump will not and cannot achieve).

      But Trump is threatening China (and every other country?) with tarriffs because he thinks somehow that will raise free money for the government and fight inflation or something. He's a moron.

    2. Josef

      As if that was ever a concern for Trump. It's amazing how much you don't know about Trump. You're either hopelessly naive or choosing to ignore the obvious. Sad.

    3. iamr4man

      If we don’t get them from totalitarian dictatorships engaged in ethnic cleansing I guess we wont be able to get them from the Trumpian USA either.

  3. d34df4n

    Right. It'll be a different revanchist totalitarian dictatorship that may or may not be involved in ethnic cleansing at the moment. No matter what, the shoes will have to come from 3rd world sweat shops or the prices just won't be acceptable to the MAGAs. If prices get jacked up by tarrifs to the point that low volume high quality American producers can compete, people will be going barefoot. They might be able to wear egg cartons on their feet, which could mitigate the cost of eggs, so there is that.

    1. SnowballsChanceinHell

      Which one? Aside from Russia, there does not exist another country that poses as great a geopolitical threat as China. And you want to turn all our manufacturing over to them. Sad.

      "No matter what, the shoes will have to come from 3rd world sweat shops or the prices just won't be acceptable to the MAGAs. If prices get jacked up by tarrifs to the point that low volume high quality American producers can compete, people will be going barefoot."

      I love this stuff. Such utter nonsense and yet so revealing.

      1. Josef

        Do you honestly think manufacturers will move operations to this country where labor is more expensive rather than to a country or countries where its cheaper like the ones mentioned above? See now that is utter nonsense. But not really revealing. Just par for the course. Your obsession with China is a nice deflection away from the fact that Trumps tarrifs will mostly be ineffective and could be detrimental to our economy. But China!!

        1. SnowballsChanceinHell

          "Do you honestly think manufacturers will move operations to this country where labor is more expensive rather than to a country or countries where its cheaper like the ones mentioned above?"

          Sure! If we make them suffer enough otherwise. But seeing as you are apparently completely ignorant about where costs arise in supply chain, you should perhaps familiarize yourself with how much it costs to produce shoes in e.g., Vietnam, versus how much they are sold for in the US. Here is a starter:

          https://www.dallasnews.com/business/2012/12/27/vietnam-trade-deal-sparks-a-running-battle-on-shoe-tariffs/

          If you allowed for doubled the cost of production, used a more automated US production line, and Nike got a 20% gross margin (more than Tesla) rather than a 42% gross margin, then the consumer costs might increase about 10%, but that would hardly mean people went shoeless.

          Anyway -- even if production was moved from China to Cambodia, Vietnam, Brazil or Mexico, that would be an improvement. No need to empower our greatest geopolitical rival.

          1. cistg

            "If you allowed for doubled the cost of production, used a more automated US production line, and Nike got a 20% gross margin (more than Tesla) rather than a 42% gross margin, then the consumer costs might increase about 10%"

            Oh, so if reality was different then things would only be a little more expensive. What insight. Let us know once you get that "more automated US production line" up and running. We're also dying to hear how you convinced Nike to cut their gross margin in half.

            1. SnowballsChanceinHell

              Read the article. In the article, New Balance provides evidence that each of those points is possible. And all New Balance needed to make it work was a tariff that amounted to about $3 on the cost of a $60-100 shoe.

              And I'm not "convincing" Nike. They just won't have a choice. But they still will be a going concern, so people won't be going without shoes.

              Anyway, your commitment to slave labor and protecting Nike's margins is just bizarre. Weird, even.

          2. Josef

            The word if is doing a lot of heavy lifting in your post. If people didn't believe a pathological liar Harris would be president elect. That one sentence is more aligned with reality than your entire post.

  4. rick_jones

    The shoes I am currently wearing were made in Slovakia. But then, I do actually look at the country of origin on what I purchase. (No, it isn’t always successful)

    How about you Kevin?

  5. Josef

    "...and there are plenty of rare earths outside China. We just have to build the mines to get at them." Depending on where it is it's probably easier said than done.

  6. Yikes

    I mean, we will see about all sorts of stuff in the next two years. I can understand how standing up on a podium and saying, "if I am elected I will take a shotgun, a beautiful shotgun as big as South Carolina, and aim it away from the United States, I tell you folks, any direction, and pull the trigger!"

    [insert giant roar from Trumpers]

    But in 2024 there are a fair amount of rich Republican dudes who would not be onboard with losing a dime, not one dime, for this doofus. So, as I said, we will see.

    I mean, massive tariffs are one level dumber than building the great wall of China on the southern border.

    1. Josef

      No one does dumb like Donald Trump. He does dumb like no one has ever seen before. Like the world has never seen before. Like genius level dumb! It's because of his big...um... brain!

    2. Yehouda

      You say it is dumb, but it is because it hurts the interests of the American people. Since Trump doesn't give a toss about the American people (except one), from his point of view it is not obviously dumb.

      From Trump's point of view, tarrifs is the easiest way to mess with the American economy.

  7. Chondrite23

    Some New Balance shoes are made in USA.

    Rare Earths (REEs) are not all that rare, but easily mineable deposits are not common. These ores tend to include other problematic elements like uranium and thorium which makes these mines ecological nightmares. We could start up some REE mines but this is a very slow process. You might take five years to open a new mine then get hit with a drop in REE prices. China saw it as a strategic advantage to mine these and absorbed the costs.

    I believe we export food to China. Just like last time, American farmers will take in the neck.

    1. Josef

      If I remember correctly Trump ended up bailing out the farmers. The fucked up thing about it is they still supported him.

    2. tango

      Well, farmers are generally pretty Conservative. They voted for this. So let them reap what they sew, so to speak... (although like last time, the GOP will probably bail them out and make me pay for it through my taxes...)

  8. iamr4man

    It’s my understanding that a substantial number of books are printed in China. In fact the Trump Bible was printed there. I suppose that will have to change.

    1. Altoid

      Why? There can easily be either a specific carve-out for trump entities or a wink-wink enforcement edict especially for them. It isn't just him and the Bibles (ties, watches, whatever)-- Ivanka has a passel of patents and trademarks that Xi gifted her during the first term, after all. Keeping her profits flowing simply can't be interfered with.

  9. Munsrat

    According to Washington Post article and Footwear News, about 70 to 75% of shoes come from China. The rest come from Vietnam and other parts of Asia. I regularly go to a shoe factory that moved from China to Vietnam back in 2014 so this migration from China has been occurring for a while. Tariffs or no tariffs this migration will continue to shift (shoe company I met with has long had plans to move additional production outside of China). Trump, of course, is not just threatening China, but many countries with tariffs. His threated tariffs to China are higher than the tariff rate he’s threatening other countries with. It won't be surprising if he places tariffs on Vietnam. As I say, production and supply chains have been diversifying out of China for a while. The Trump tariff machine likely will accelerate that trend but in unpredictable directions, depending on which other countries are swept up in it.

  10. D_Ohrk_E1

    When he raised tariffs and again when China's COVID lockdowns were extended, manufacturers were already moving production to SE Asia. This may be moot if, as he's threatened to do, puts up tariffs on all imports, not just from China.

    On a similar vein, I think we'll start to feel the effects of Trump's threats to deport undocumented workers and others like TPS immigrants. Prior to his inauguration, we might see an exodus of people looking to avoid shenanigans of being separated. If that happens, we'll see worsening labor tightness and inflation return, but this time focused more on labor and services and less on goods.

    Combine these two policies and we could see some sui generis economic fallout.

    1. SnowballsChanceinHell

      "If that happens, we'll see worsening labor tightness and inflation return, but this time focused more on labor and services and less on goods."

      You mean increasing wages in the service sector.

      1. D_Ohrk_E1

        And because labor is by far the largest % of the cost of a service or a good, prices for everything will go up.

        As more people are removed, labor tightness will worsen. It'll be an upward spiral of prices forcing the Fed to lean into rate increases. But because more people are removed, labor supply will keep getting worse even while demand weakens. Stagflation.

        1. Altoid

          I can only hope that this doesn't get noticeable until about a year into the term, when no matter how he lies and who he accuses, people will have only him and his party to blame for it.

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