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Boon or Bad News? FFANY Brands Sound Off on Upcoming Tariff Increase

On the first day of FFANY’s Market Week in New York City, occurring in conjunction with the Footwear Show New York Expo (FSNYE), brands from across the world discussed the pros and cons of the scheduled increase in tariffs on $300 billion of Chinese goods—including footwear.

Held at the Warwick Hotel in Midtown Manhattan, FFANY is a diverse collection of primarily wholesale and direct-to-consumer footwear brands, and their views on the ongoing trade war was accordingly varied. Although many of the brands there do not source from China, those that do anticipate at least a small amount of price disruption.

For All Black, which produces most of its shoes in Taiwan, Marty Rose, an agent and distributor for the brand, said the trade war hasn’t had much impact so far, though the company does plan to increase its prices if the tariffs do take effect on the slated Sept. 1 date.

“A third of our goods, which are mostly for private labels and some large customers, are made in China. So, we’ve had discussions with customers about the topic and said, ‘If we need to increase, we’re going to increase and let you know in advance,'” Rose told Sourcing Journal, noting that All Black was in a good position to weather those blows. “We’re also looking at really not a large increase. The way this brand is organized, I don’t have reps. So, I have a little bit of a cushion. We can absorb some of the cost. I don’t think it will increase dramatically.”

One of the reasons All Black is positioned well for the tariff increase, Rose added, is because of its price point.

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“If our shoe is $165 and we increase it to $170, people will deal with that,” he said.

Paul Mayer, founder and namesake of high-end ballet flat brand, Attitudes by Paul Mayer, said the brand expects the new tariffs to primarily affect inexpensive, lower-end products and the consumers who purchase them.

“It’s going to hurt the lower middle class,” Mayer told Sourcing Journal. “Finding T-shirts for $3 isn’t going to happen anymore. Always, it’s the poor people that are going to suffer for it. To punish 300 million Americans because the other 30 million are doing pretty good, it kind of sucks.”

Even at Attitudes by Paul Mayer’s price point, however, Mayer said the act of designing footwear for an American audience begins with understanding how to interact with the already existing, and already sizable, tariff burden. Even with pre-trade-war duties, Mayer said his brand actually began incorporating different materials into products to avoid alienating its price-conservative customer base.

“To be able to do an espadrille, if it’s all fabric, it’s a 37 percent duty,” Mayer said. “If I have [leather], it’s 10 percent. I want to be under $300. So, $250 to $260—I don’t want to touch $300.”

For those without a direct connection to the increase in duties, however, the news of additional tariffs on Sept. 1 came as a welcome boon.

National sales manager for Lines of Denmark, Dan Butler, said the brands he helps to distribute throughout the U.S. are not typically made in China. And as such, Lines of Denmark stands to benefit from the added competition that more challenging Chinese sourcing may bring.

“For us, we’re not as concerned as a lot of other people, perhaps naively. But, if it’s going to happen, it’s going to happen to everybody,” Butler said. “That kind of levels the playing field for us. So we’re not as all-consumed about it.”

Sabrina Herrera, part-owner of Mexican luxury brand, Regina Romero, took that point of view, too. For a brand that has dealt with trade issues between the U.S. and Mexico for some time, the addition of Chinese tariffs feels like “playing fair.”

“Since Mexico is a manufacturer of shoes, the industry was protected for 10 years after the NAFTA agreement. Nobody could import shoes into Mexico,” she said. “But then that stopped. By 2005 we started being flooded by shoes from all over the world. But now what happened is that we had a devaluation, that’s one thing. Then, the other thing is that [some of the premium brands] have resorted to using synthetic materials in order to lower the costs.”

All of this, Herrera explained, added up to a difficult position for her brand. In Mexico, where Regina Romero is considered to be one of the pioneering national luxury footwear brands, the addition of so many less expensive, lower quality luxury brands diluted the market, forcing Regina Romero into a smaller niche.

With a lessened ability to capitalize on cheap Chinese needles, Herrera believes the tariffs may end up helping the brand in the United States.

“Now, I understand why you can find handmade shoes for $40,” Herrera said regarding the advantages Chinese producers have compared to their North American counterparts. “And everybody is making money. So, the idea is to really have fair trade and also good quality shoes at a very good price.”