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US Footwear Imports From China Bounced Back in July Ahead of Tariffs

Facing a Sept. 1 imposition of tariffs, footwear importers picked up the pace of shipments from China in July.

China’s footwear import market share in value terms increased to 49 percent for the year through July compared to 48.2 percent for the first half of the year through June, although it was down from a 53 percent share for all of 2018, data from the Commerce Department’s Office of Textiles & Apparel (OTEXA) showed. In volume terms, China’s market share ticked up to 65.5 percent from 65.3 percent month to month, but still below the 69.7 percent share for 2018.

For the month compared to June, footwear imports from China were up 7 percent compared to a 15.9 percent increase from the rest of the world, according to analysis from the Footwear Distributors & Retailers Association (FDRA).

However, footwear imports from China for the year to date through July were down 7.3 percent, to a value of $7.37 billion, compared to $7.95 billion a year earlier, according to OTEXA. In volume, shipments from China were fell 12.5 percent to 912.25 million pairs in the first seven months of the year from 1.04 billion pairs in the year-ago period.

FDRA said duties reached a record July take of $300.2 million. At that pace, full-year average duties per pair are on track to climb to a record high in 2019, the organization noted.

“If Chinese duties per pair rise as much as expected, many importers soon will have nowhere to turn to avoid paying even higher duties per pair,” FDRA said.

While China is still the top supplier and has shown some resiliency, the U.S.-China trade war has clearly caused importers to shift their sourcing strategies. OTEXA’s latest report shows the next five top suppliers–Vietnam, Indonesia, Italy, India and Cambodia–all posted increase in year-to-date shipments to the U.S.

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Nathan Serphos, senior vice president of accessories and footwear for Michael Kors, said last month that four years ago the company imported 80 percent of its footwear from China and 20 percent elsewhere.

“By year end, we’ll probably be 80 percent non-China and 20 percent China,” Serhpos said. “So in that sense, I think we’re quite there already in mitigating the risk.”

Mimi Vaughn, Genesco’s chief operating officer, said on the company’s conference call last week that on an annual basis, about one-third of its merchandise is imported from China.

“Since most of this product is leather shoes, the tariffs, unfortunately, went into effect at the start of September versus in mid-December,” Vaughn said. “We pulled forward as much inventory as we could for receipt ahead of Sept. 1 and have been working with our vendors to share the now higher cost. The devaluation of the Chinese yuan is also helping lessen the near-term impact.”

Vietnam, the No. 2 supplier of footwear to the U.S., saw its shipments rise 11.5 percent to $3.55 billion for the year to date through July. This gave the country a 26.3 percent import value market share, which dipped from 26.8 percent a month earlier, but was still ahead of the 23.5 percent share it held in 2018.

Imports from Indonesia were up 7.9 percent in the period to a value of $923.77 million, while India’s shipments rose 9 percent to $238.44 million and imports from Cambodia jumped 33 percent to $244.11 million. Italian footwear imports increased 3.9 percent to $926.99 million.

Looking at imports by category, athletic footwear shipments dipped 0.9 percent in July, according to FDRA, as declining shipments from China offset increases from Vietnam and Indonesia. Boot imports were up 10.9 percent, as surging shipments from Vietnam offset a decline from Indonesia.