LA Footwear Innovators Say Tariffs Aren't Enough to Spur a Reshoring Renaissance

Yahoo

07-05-2025

The pandemic shone a spotlight on American makers for the first time in years, illuminating unique capabilities and advantages that set them apart from Asian super-factories and their dependably cheap labor. Covid concern has now faded, but global geopolitical conflicts and snarled supply chains have deepened doubts about whether the sourcing status quo can ever return to what it once was.
Footwear manufacturing, like apparel production, has long operated under what Martin, a veteran of VF Corp., referred to as a 'locust industry mentality': the swarming of a sourcing market, the swallowing up of local resources, and finally, the flight away from what's been used up to something newer, shinier and cheaper.
'There are costs that are beyond what brand pays a factory for FOB in Asia or elsewhere,' he said. In today's sourcing landscape, there are many other relevant factors at play, from 'human inputs to environmental inputs, surety of supply, speed, and response to market logistics concerns,' he believes. 'It's looking at those in the aggregate and coming up with a formula that makes sense.'
But first, brands must reexamine their long-term goals related to sourcing and reframe their thinking about cost, according to Stephen Martin, CEO of KX Lab , a startup pioneering the use of 3D-knitting for footwear uppers.
The reshoring of American footwear manufacturing at a meaningful scale will take more than panic caused by inflammatory headlines, and it will require deep conviction that outlasts the modern news cycle. In the view of the city's most forward-looking producers, tariffs have lit a flame, but it will take oxygen—in the form of meaningful support from the industry and policymakers—to ignite a true blaze.
But whether those seeds of intrigue take root and grow into real business is yet to be seen. And while the White House is laser-focused on onshoring the production of hard goods and industrial technology, like chips, solar panels and automobiles, the soft-goods sector is plowing forward in the shadows as it has for decades—with or without the help of the federal government.
In Los Angeles, where footwear producers and innovators have been laboring for years to claw back some of the market share lost long ago to far-flung sourcing locales, the talk of President Donald Trump's tariffs has spurred a 'jolt' in interest in making shoes closer to home.
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'That's where we're trying to position things and engage with these brands,' Martin said. 'Because if you don't come from a point of value positioning, then the race to the bottom in terms of cost is a zero-sum game. We'll never be competitive in that regard.'
Sean Scott, CEO and co-founder of Fashion District stalwart and footwear factory ComunityMade, agreed that there's no competing with markets like China or Vietnam on the criteria that made them the world's premier footwear sourcing destinations.
'We all came up in an environment where decisions were made strictly on landed costs, and that made sense if everybody was making their stuff in Asia and you're only comparing to other Asia manufacturers,' he said. 'But we're talking about a new reality centered on a more holistic view of what cost is.'
In L.A., the average minimum-wage worker's hourly rate surpasses what a cut-and-sew operator in China might make over the course of several days. While brands have traditionally viewed the cost of doing business in the U.S. as an inhibiting (if not totally prohibitive) factor, 'there are a myriad of advantages to making things closer to where the consumers are, not overseas,' Scott argued.
Adaptability to marketing teams' whims or ever-evolving market challenges. Sustainability. Quality control. The comfort and ease of partnership with suppliers in the same time zone, who speak the same language.
'The entire list is advantages on the side of making things closer,' he said. 'The one disadvantage is out the door factory cost, which is totally artificial and based on manipulation by an authoritarian government,' he added, referring to the Chinese Communist Party's inexorable ties to the country's industrial base.
ComunityMade's Downtown, L.A. headquarters and factory.
But there's a way to combat China's unfair advantages and usher in a new reality, L.A.'s producers believe, and it depends on championing the spirit that once made America a master of invention and a leader in manufacturing. It involves doing away with cheap labor in favor of advanced technology, and eschewing overproduction to focus on providing the market with the products it demands, when it demands them.
'We need to change the whole entire manufacturing system from forecasting and pushing [out product] to a system of proving our concepts and pulling [in business],' said Alex Zar, CEO of Lalaland Production and Design, L.A.'s biggest leathergoods manufacturer.
'We're never going to be able to produce the 2.7 billion pairs of shoes annually imported into United States—and that is not the goal,' he said definitively. 'We want 1 to 5 percent in the next five years, and that's all we need.' That critical mass of nearly 38 million pairs of shoes 'would help us to ramp up the supply chain, but not the same way [as Asia],' he added.
According to Zar, what the U.S. lacks in worker headcount it more than makes up for in ingenuity. L.A. producers are pioneering processes that streamline production and augment capacity, from 3D-printing (now being used to create shoes, and eventually, the expensive molds traditionally produced exclusively in Asia) to engineered computer knitting and direct-attached injection molding. This is 'the next level of employment' in a factory setting, he believes—'not the traditional, labor-intensive factory.'
Scott agreed, saying that innovation, not low costs and high volumes, will establish the L.A. market (and the American production force more broadly) as a beacon for the industry at large.
'We're not trying to be traditional Made-in-the-U.S.A.—and I think we all like to be careful when we say that, because we all have this great respect for traditional shoemaking—but that's not what's going to bring manufacturing back,' he said.
With the onset of the Trump tariffs, more brands are sitting up and taking note of the possibilities, and their motivations have morphed. Where they once sought to create Made-in-the-U.S.A. collections to capture the marketable cachet of domestically made product, they're now evincing a real desire (and sometimes desperation) to establish onshore sourcing capabilities.
A sneaker prototype from Zar's operation.
'These conversations were already being had, but they've definitely moved into a higher, C-suite level,' said Shannon Scott, ComunityMade's co-founder and president. 'I think the people that are planning for the future know that they have to de-risk some portion of their supply chain.'
The Scotts are now fielding multiple inquiries a day with email headlines that read, 'How to make shoes in the U.S.' or 'I want to move out of Asia.'
'Now everybody's like, 'We seriously need to consider this,'' Scott said. And after sitting down with ComunityMade and its symbiotic network of L.A. co-producers, brands tend to have a similar reaction, Scott said: ''It's not as scary as I thought. I'm doing the cost analysis, these people are providing me a good education, they're providing me a future framework, they're much more buttoned-up than we thought.''
KX Lab's Martin agreed that tariff mania has pushed talk of onshoring to a higher echelon of decision-makers. 'It's allowed the conversation to bubble to the surface much more than just existing within the innovation and design community,' he said.
But while the White House's disruptive trade policy and overall market uncertainty have brands strategizing new paths forward, lawmakers must do more to support U.S. manufacturers as they work to scale, he said.
'If onshoring is so important to the future of manufacturing in this country, there has to be some paving of that way from the government—policy, loans—that make it viable for manufacturers to really get going, and not have them on the vine withering under tariffs or the brands' decisions,' he said.
When Martin was stationed in China as a sourcing expert for one of America's oldest heritage brands, he took note of the benefits provided to local manufacturers. 'There were so many subsidies—subsidized labor, tax benefits, land benefits for the manufacturers that were moving in,' he explained.
Those breaks allowed the country to ascend to its current status as the 'World's Factory' in a matter of years, not decades. Manufacturers 'were enticed to come to China because the lower labor costs and the governmental support that parted the Red Sea of all those regulations.'
Conversely, American manufacturers looking to ramp up production are staring down the barrel of massive duties on equipment and inputs, he explained. 'I think this is going to be an uphill battle that should be recognized: the import tax for machinery should not be part of the tariffs,' he said. 'If there's a machine that's next level, we should have access to that and be able to deploy it here without having some sort of punitive tax.'
Zar agreed that tariffs on their own will not be enough to ensure the sustained growth of American manufacturing, though the 'jolt' provided by the flurry of executive orders on trade has been 'very, very necessary.'
'We don't know where it's going to go, if it's going to change the paradigm… but at least at this moment, it has been a positive,' he said.
Duties may inhibit the competition by driving up import costs on foreign-made shoes, but effective policy should also bolster U.S. producers, allowing them to become the more viable and attractive alternative, he believes.
'In 2000, when I was transferring my factory from Italy to United States, I had been offered a free factory—completely rent free—in China, and a loan with zero interest. Why can't we do the same thing in here?' he asked. 'Why can't we get a special employment tax credit for the employees we are hiring? Why can't we give special tax credits to the consumers that buy the Made-in-the-U.S.A. product?'
'We are trying to spearhead and convince everybody that this is the moment. Put your money where your mouth is. Give us the commitment, and we'll show you what it is possible,' Zar said. 'We showed them during the pandemic; how the hell could we have imagined that we would be able to produce 180,000 medical gowns daily out of Los Angeles and serve the entire nation?'
What should have been a moment of triumph—wherein Downtown, L.A. producers answered the call of hospital systems and local governments across the country to produce essential PPE—has now become a cautionary tale among Fashion District veterans. Manufacturers like Zar, who invested personally in the machinery and materials to serve a real and dire need, were dropped when the Covid panic subsided in favor of low-cost offshore options.
Scott said he could see the same thing happening now, five years later, if the White House continues to waffle on its trade policy. 'If I had a direct line to the administration, I would be like, 'Pick a lane,'' he said. Even as ComunityMade nurtures hope for the opportunities that are rolling in, he knows the tide could go out again with the president's next tweet or Truth Social post.
'There have been a few fortunate cases where a brand said it was committed regardless of the chaos, but you can hardly blame somebody, especially when that 90-day pause came, for saying, 'Well, let's just see how this settles,'' he said. 'Humans are very resilient and resourceful, and we'll make it work,' he added, 'but the uncertainty is a danger.'
In the near term, the Scotts and their network are determined to keep their heads down as they push to gain new ground. The interest in domestic manufacturing has been growing steadily, regardless of presidents or policies, and they believe that trajectory will continue unabated as brands recognize the inherent upsides of doing business in their backyard.
'If we do our jobs right, we don't need tariffs to make this thing work. We could totally use the help, but we were doing it before anyway,' Scott said.
'In a perfect or a better situation, [success] should be agnostic to tariffs. If we're viable, if we're resilient, then tariffs will only be a blip on the radar for us,' Martin added. 'Hopefully it's the flash point that makes it happen, but for longevity to be to be there, there has to be a supply chain that has the resiliency to weather the storms.'