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Vietnam’s Slow Rebound Stubs US Footwear Import Growth

Slowing down from their rapid pace leading up to the key holiday selling period, U.S. footwear imports increased 28.2 percent to 2 billion pairs in the year to date through November compared to the same period in 2020, according to the Commerce Department’s Office of Textiles & Apparel (OTEXA), following 30 percent year-over-year gains for the first 10 months of the year.

Footwear imports from the top supplier, China, grew 30.4 percent to 1.2 billion pairs in the 11-month period, just above the accumulated 29.8 percent gain the first 10 month of the year, despite ongoing tariffs on the category and calls from industry groups representing importers to repeal them.

On Monday, Steve Lamar, president and CEO of the American Apparel & Footwear Association, in a letter to President Biden on the container shipping crisis, called on the administration to “provide immediate” relief for high costs being incurred by importers “by removing temporary punitive tariff costs, such as the U.S. government’s punitive Section 301 tariffs on China our industry, that every facet of the U.S. economy must still pay.”

Vietnam, the second biggest footwear supplier to the U.S., saw its shipments drop to an 18.4 percent year-to-date increase to 477.28 million pairs compared to a 26.8 percent rise the prior month, as the fallout from factory closures this summer were still being felt.

Nike reported minimal revenue gains for the second quarter, citing Covid-related factory closures in Vietnam as having a negative impact. Chief financial officer Matt Friend said last month that all impacted factories had reopened and employee attendance rates had improved, with Nike’s Vietnam reopening “on plan.”

Friend said at the time that the Vietnam factory closures led Nike to cancel production of roughly 130 million units.

China and Vietnam continue to dominate footwear production, combining for 1.68 billion of the 2 billion pairs, or 83.9 percent, imported in the first 11 months of 2021, up from an 83.6 percent footwear import market share the prior month, according to OTEXA.

Rounding out the Top 5 supplier countries, footwear imports from Indonesia stepped up 37.9 percent year to date through November to 117.5 million pairs, while shipments from Cambodia rose 21.3 percent to 52.9 million pairs and imports from India jumped 52.6 percent to 26.89 million pairs.

However, India’s growth faces challenges, with manufacturers protesting a Jan. 1 tax hike that threatens their prospects. Footwear manufacturers and traders in hub city Agra shut shops, describing the tax hike to 12 percent from 5 percent for shoes under 1,000 rupees ($13.43) as a threat to their businesses.

According to industry estimates, India’s footwear market is expected to be $15.5 billion by 2022 and to grow at an estimated 15 percent annual rate through 2030.

“Manufacturers will be pressured for underbilling, even though there will be an input tax credit,” Rajiv Wasan, general secretary of the Agra Footwear Manufacturers & Exporters Chamber, told Sourcing Journal. “The shoes in this price range have naturally become costlier. The consumer will pay 7 percent extra from what they were paying earlier. The trader in between will have a lot more difficulty with this.”

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