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Footwear Sourcing Shifts in Line With US-China Trade War

The trade war between the U.S. and China has had a negative impact on U.S. footwear imports from the top supplier.

With 10 percent tariffs imposed on China by the Trump administration, including on some leather raw materials, plus a threat of another 25 percent tariff hike in 2019 that hasn’t yet come off the table, companies are seeking alternative sources and the latest data from the Commerce Department’s Office of Textiles & Apparel (OTEXA) shows where they’re turning.

“Companies are really pulling back from China and footwear is much more exposed than apparel so far from the tariffs,” said Nate Herman, senior vice president of supply chain at the American Apparel & Footwear Association. “Everyone is trying to get out of China as quickly as they can.”

For the year through October, U.S. footwear imports from China fell 0.4 percent to $11.91 billion worth of merchandise compared to $11.96 billion in the same period in 2017. Other Asian nations and European suppliers picked up much of the slack.

Among Asian countries, imports from Vietnam rose 14.4 percent to a value of $5.17 billion, while Indonesia’s shipments to the U.S. were up 4 percent to $1.3 billion. Cambodia’s grew 28.8 percent to $279.07 million and imports from Bangladesh advanced 18.4 percent to $109.67 million.

“Cambodia has climbed out of nowhere,” Herman said, adding that Indonesia, Ethiopia and Myanmar “are coming up fast.”

Traditional European footwear manufacturing countries also gained ground this year, with Italy up 12.6 percent to $1.25 billion, Spain rising 4.6 percent to $203.59 million, and Germany increasing 25.6 percent to $133.45 million.

Imports from Mexico were also on the rise, increasing 25.8 percent to $383.98 million. On the other side, Brazilian imports fell 9.7 percent to $155.19 million, as the country’s economy continues to struggle.

Overall, the U.S. imported $22.17 billion worth of footwear for the first 10 months of the year, an increase of 4.7 percent from the year-ago period. U.S. footwear exports were up 10.6 percent for the first 10 months of the year to $465.14 million. Canada was the main recipient, with exports to the northern neighbor rising 1 percent to $124.96 million, while exports to China nearly doubled to $61.13 million worth of merchandise.

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