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Tariff Toll Sends US Footwear Imports From China Down 7.6 Percent This Year

U.S. footwear imports from China fell 7.6 percent in the year to date though August compared to the same period in 2018 to a value of $8.58 billion, as the trade war between the two countries took its toll and caused significant sourcing shifts, according to new data from the Commerce Department’s Office of Textiles & Apparel (OTEXA).

China’s market share of U.S. footwear imports did tick up 0.25 percent in the month to 49.25 percent compared to the year to date in July, as all footwear imports dipped 0.05 percent to $17.42 billion for the first eight months of the year compared to the same period in 2018, according to OTEXA.

At the same time, the next five top suppliers posted increases for the comparative year to date through August. No. 2 Vietnam’s imports into the U.S. increased 11.3 percent to a value of $4.54 billion. Vietnam’s imports market share slipped to 26.1 percent compared to 26.3 percent in the year to date through July.

The August data came in the lead up to the Sept. 1 imposition of 10 percent tariffs on Chinese imports in the category. This extra cost and the threat of further punitive duties and on-again, off-again trade talks between the two countries have caused a slow but steady flight from China to alternate sources.

Footwear imports from Indonesia jumped 9.6 percent in the period to $1.41 billion, as shipments from Italy gained 2.7 percent to $1.05 billion and imports from India rose 5.4 percent to $297.34 million.

According to the Footwear Distributors & Retailers of America (FDRA), duties reached $282.8 million in August, the second-biggest tally for the month on record.

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“At this pace, full-year average duties per pair are on track to climb to a record high again in 2019,” FDRA said. “This view is reinforced by the Trump administration’s looming duty hikes against Chinese footwear.”

Mike Jeppesen, president of global operations at Wolverine Worldwide Inc., told Sourcing Journal recently that the company “will continue to reduce our dependence on China as a sourcing country.”

“We have proactively expedited the shipping from China of available product,” Jeppesen said. “We’re prepared to customs clear and pay duties on product in our free trade zone DCs prior to a duty increase.”

While the White House has yet to confirm a tentative deal to suspend the punitive tariff increase on U.S. imports of $200 billion worth of goods from China to 30 percent from 30 percent set to take effect on Tuesday as planned, Rick Helfenbein, president and CEO of the American Apparel & Footwear Association, said, “the reality is that everything currently being hit with punitive tariffs is still being charged.”

“This means Americans are still being burdened with an additional 25 percent on backpacks, handbags, luggage, hats and gloves,” Helfenbein said. “It also means that 92 percent of our clothing, 53 percent of our shoes and 68 percent of our home textiles imported from China continue to be charged an additional 15 percent tariff. These rates are on top of the hefty tariffs already being charged on these products.”

FDRA noted that select categories of footwear imports were broadly lower in August. Athletic footwear imports slipped 2.2 percent in August, as declining shipments from China offset increases from Vietnam and Indonesia. Bootwear imports were off 0.5 percent, as surging shipments from Vietnam and Indonesia were unable to mitigate a tumble from China.