Latest news with #FootwearDistributorsandRetailersofAmerica
Boston Globe
5 days ago
- Business
- Boston Globe
Trump wants America to make things again. Does it have what it takes?
But there is a catch. The operation works only because his company, Saitex, runs a much bigger factory and fabric mill in southern Vietnam where thousands of workers churn out 500,000 pairs of jeans a month. Trump's tariffs have upended supply chains, walloped businesses and focused the minds of corporate leaders on one question: Does America have what it takes to bring jobs back? Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up In many industries, the undertaking would take years, if not decades. The United States lacks nearly every part of the manufacturing ecosystem -- the workers, the training, the technology and the government support. Advertisement 'There are some harsh realities,' said Matt Priest, CEO of the Footwear Distributors and Retailers of America, a trade group. And Trump's strategy is shrouded in uncertainty. Last month, he said, 'We're not looking to make sneakers and T-shirts' in the United States. But his steepest tariffs, set to take effect in July, were directed at countries that make clothes and shoes for sale to Americans. Vietnam, at 46%, was one of the hardest hit. Those tariffs, intended to push companies to bring factory work home, were deemed illegal by a ruling last week by the U.S. Court of International Trade. That decision was temporarily paused by a different court, giving judges time to evaluate an appeal by the Trump administration. Amid all the legal wrangling, Trump has promised to find other ways to disrupt the rules of trade. Advertisement Trump has exposed the difficulties in closing the vast distances, geographical and logistical, between where many products are made and where they are consumed. The gulf was laid bare during the COVID-19 pandemic, when strict health policies in Asian countries led to the shutdown of factories. When they reopened, orders had piled up and snarled shipping routes trying to ferry goods across thousands of miles. For executives like Bahl of Saitex, the turmoil caused by Trump's trade policies has brought fresh urgency to the challenges of managing global supply chains. 'The extended fear and uncertainty that COVID brought was unforeseen,' Bahl said. 'There was nothing that could help us except survival instinct.' In response, Saitex opened a factory in Los Angeles in 2021. Since Trump announced his intention to impose steep tariffs on Vietnam, Bahl has been thinking about how much more he can make in the United States. He could probably bring about 20% of production to the States, up from 10% today, he said. He believes Saitex could be a blueprint for other apparel companies: 'We could be the catalyst of the hypothesis that manufacturing can be brought back to the United States,' he said. But his experience highlights how hard it would be. There are no mills in America on the scale of what the industry needs, nor major zipper and button suppliers. The cost of running a factory is high. Then there is the labor problem: There just aren't enough workers. Advertisement American factories are already struggling to fill around 500,000 manufacturing jobs, according to estimates by Wells Fargo economists. They calculate that to get manufacturing as a share of employment back to the 1970s peak that Trump has sometimes called for, new factories would have to open and hire 22 million people. There are currently 7.2 million unemployed people. Trump's crackdown on immigration has made things worse. Factory jobs moved overseas to countries, like Vietnam, that had growing populations and young people looking for jobs to pull themselves out of poverty. The future that Trump envisions, with millions of factory jobs, would have to include immigrants seeking that same opportunity in the United States. Steve Lamar, CEO of the American Apparel and Footwear Association, an industry lobby group, said there was a gap between a 'romantic notion about manufacturing' and the availability of American workers. 'A lot of people say we should be making more clothing in the U.S., but when you ask them, they don't want to sit in the factory, nor do they want their kids to sit in the factory,' he said. 'The problem is that there aren't any other people around,' he added. At Saitex's Los Angeles factory, most of the workers come from countries like Mexico, Guatemala and El Salvador. Some 97% of the clothes and shoes that Americans buy are imported for cost reasons. Companies that make everything in the United States include firms like Federal Prison Industries, also known as Unicor, which employs convicts to make military uniforms for less than minimum wage, Lamar said. Advertisement Other companies make some of their fashion lines in the United States, like New Balance and Ralph Lauren. Others are playing around with a model where they make small batches of clothes in the United States to test designs and determine their popularity before commissioning big orders -- usually from factories in other countries. It is hard to make things in great volume in America. For Bahl, it boils down to the cost of a sewing machine operator. In Los Angeles, that person gets paid around $4,000 a month. In Vietnam, it is $500. In Saitex's factory there, which Bahl set up in 2012 in Dong Nai province, an hour's drive from Ho Chi Minh City, more than a dozen sewing lines are neatly laid out and humming six days a week. On a recent day, hundreds of workers pushed panels of jeans through sewing machines so quickly that the fabrics, briefly suspended in the air, looked as though they were flying. The work was augmented by sophisticated machines that can stitch labels onto a dozen shirts at a time, or laser a distressed pattern onto multiple jeans. Nearby, at a spray carousel, a robot mimicked the precise movements of a worker spraying denim. 'The speed is much higher in Vietnam,' said Gilles Cousin, a plant manager overseeing the sewing section. If Trump really wants to bring jobs back, Bahl said, he should give some tariff exemptions to companies like Saitex that are doing more in the United States. American factories like his can't expand without importing many of the things that go into their finished products. For its part, Saitex ships bales of American cotton to Vietnam, where its two-story mill turns fluffy cotton lint into thread and, eventually, rolls of fabric. That fabric is then dyed and shipped back the United States for his Los Angeles factory. Advertisement Until there is enough momentum from companies making things in the United States, the fabric, zippers and buttons will have to be brought into the country. Moving production from overseas would require huge investments, too. Saitex has plowed around $150 million in Vietnam, where its factory recycles 98% of its water, air dries its denim and uses technology to reduce carbon dioxide emissions and cut down on labor-intensive practices. In the United States, Saitex has spent around $25 million. These are long-term commitments that take at least seven years to recover, according to Bahl. Ultimately, if Trump decided to stick to his original 46% tariff on Vietnam and Saitex could not soften the financial blow, it would have to look to other markets to sell the products it made in Vietnam -- like Europe, where it sends about half of what it makes. 'But then,' Bahl said from Los Angeles, 'what happens to our factory here?' This article originally appeared in
Yahoo
29-05-2025
- Business
- Yahoo
Nike, Adidas, Puma, Steve Madden, Skechers, Caleres + Dozens More Companies Urge Trump to Exempt Shoes From Tariffs in FDRA Letter
The footwear industry is making sure its voice is heard in Washington. The Footwear Distributors and Retailers of America (FDRA), along with more than 80 leading U.S. footwear firms, on Tuesday sent a letter to U.S. President Donald J. Trump urging him to exempt footwear from his administration's reciprocal tariff plan. More from WWD Looming U.S. Tariffs Drove Swiss Watch Export Surge in April Tiptoeing Around Trump, Fashion Refines Trade War Rhetorical Style Is Deckers' Hot Streak Coming to An End? Hoka's U.S. Slowdown + Tariff Worries Weigh on Stock 'We are hit particularly hard by the tariff actions, because the U.S. government already places asignificant tariff burden on our industry before any new tariffs are added,' the letter stated. It cited as one example children's shoes, which has 'rates of 20 percent, 37.5 percent, and higher, before accounting for the reciprocal tariffs.' The letter also noted that the new reciprocal rates are 'stacked on top of the existing high footwear tariff rates,' resulting in many American footwear companies now having to pay tariffs ranging from 'more than 150 percent to nearly 220 percent.' Significant price increases preclude American consumers from having affordable footwear options, the letter stated. More importantly, the letter emphasized that 'these tariffs will not drive shoe manufacturing back to the U.S.' On the contrary, the footwear firms emphasized that the new tariffs will remove the 'business certainty' that is needed to take on significant capital investment required to both plan for sourcing shifts and invest in the machinery and materials needed to produce shoes in the U.S. 'We are in fact the one industry where tariffs do not significantly increase domestic production; tariffs just become a major impact at the cash register for every family,' the letter stated. Moreover, many footwear firms don't even know how they're going to pay the costs of already shipped merchandise that's now arriving on U.S. shores, and the inability to pay would place many U.S. footwear businesses 'at imminent risk.' The companies that signed the letter—including Adidas, Brooks, Caleres, Columbia Sportswear, Crocs, Designer Brands, Genesco, Nike, Puma, Rocky Brands, Skechers, Steve Madden, Under Armour, VF Corp., and Wolverine Worldwide, among others—added that they are 'deeply concerned about imminent U.S. footwear job losses, added costs for consumers, and reduced consumer spending that will fundamentally hamper our industry and harm the entire U.S. economy.' The signers of the letter are seeking a more 'targeted' approach—one that focuses on strategic items rather than basic consumer goods—that would advance critical national security imperatives without causing unnecessary pain to American families.' The letter to Trump was also sent to Howard W. Lutnick, U.S. Secretary of Commerce, Jamieson Greet, U.S. Trade Representative, and Scott Bessent, U.S. Secretary of the Treasury. Higher tariffs have been a growing concern since Trump won the presidential election last November. Crocs CEO Andrew Rees told investors in February during a conference call on fourth quarter earnings results that the firm was embedding tariff increases on goods from China and Mexico, based on then-expected rates that were presumed to stay in place for the remainder of 2025. FDRA data showed that footwear sales plunged 26.2 percent for the week ended Feb. 22 from year-ago levels on fears over tariff increases. But then Trump disclosed his administration's plans to implement reciprocal tariffs on April 2, with the new rates blowing existing duty estimates out of the water as footwear firms scrambled to figure out how to adjust their business model to take into account double-digit percent rate increases. And if the reciprocal tariffs weren't bad enough, Trump went on to hike duties on goods from China, with some as high as 145 percent. Currently, there is a 90-day pause on the reciprocal increases, while keeping a universal base increase of 10 percent, on the hopes that other nations will come to the table to negotiate an improved trade deal that benefits the U.S. The exception is China, for which there is no 90-day pause. Meanwhile, footwear industry executives have formed a forward-thinking research think tank, Footwear Innovation Foundation, that will help the shoe sector become more proactive in reshaping the future of footwear in the U.S. Best of WWD All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos]
Yahoo
28-05-2025
- Business
- Yahoo
FDRA Pushes Trump For Relief as Vietnam Tariff Talks Resume in June
The Footwear Distributors and Retailers of America (FDRA) is hoping it can secure some reset in trade policy for the footwear sector. In recent months, President Donald Trump has disclosed the implementation of reciprocal tariffs, and then walked back on the higher duties by putting them on hold for an average of 90 days. And while it can be argued that even at the temporarily reduced rates that tariffs are still too high for footwear, the timeframe for the freeze does give countries a period to allow for talks centered on the renegotiation of trade agreements. More from WWD Golden Goose Q1 Sales Grow 11 Percent, Brand Expands Global Presence Looming U.S. Tariffs Drove Swiss Watch Export Surge in April Tiptoeing Around Trump, Fashion Refines Trade War Rhetorical Style 'We applaud President Trump for taking a more thoughtful and strategic approach to the tariff policy — clearly listening to the concerns we've shared and the conversations we've led, one that acknowledges the real-world challenges we face in the footwear industry,' said FDRA president and CEO Matt Priest on Wednesday. 'For too long, outdated tariffs have driven up costs for working families and threatened jobs across our industry. This shift in direction is both refreshing and necessary.' Priest noted that increasing footwear manufacturing in the U.S. isn't feasible due to constraints involving supply chain, labor and costs. And on Sunday, even Trump—to the dismay of the National Council of Textile Organizations—acknowledged what products might be best made state-side. 'We're not looking to make sneakers and T-shirts. We want to make military equipment. We want to make big things,' Trump said to reporters as he was about to board Air Force One. He elaborated: 'I'm not looking to make T-shirts to be honest. I'm not looking to make socks. We can do that very well in other locations. We are looking to do chips and computers and lot of other things, and tanks and ships.' Priest said that the recognition by Trump and his administration of those constraints gives the U.S. an opportunity to both reset decades of misguided trade policy and move the footwear sector forward with smart, targeted solutions. 'We're encouraged by the President's leadership and urge the administration to stay on this path,' the FDRA CEO said. 'By embracing a modern, pragmatic trade framework, the U.S. can support consumers, protect American jobs, and finally put the footwear industry on the right track.' As for what happens when the first of the 90-day pause period for most global reciprocal tariffs ends on July 9 is anyone's guess. Last Friday, Trump threatened on social media a 'straight 50 percent tariff on the European Union' beginning on June 1 when he became frustrated that talks between the U.S. and EU were 'going nowhere.' But then on Monday he agreed to restore the July 9 deadline to allow for talks to continue between the U.S. and the 27-member nation bloc. Thus far, the U.S. reached a trade deal with the U.K. earlier this month. In the background, there are talks occurring between the U.S. and a number of other countries. One source told Footwear News that negotiations in progress involve 'several dozen countries,' but this individual declined to disclose country names. This person did indicate that there is pressure to get deals done by the timeline due to uncertainties over whether Trump would extend the deadline or put rates back up to their reciprocal level. Treasury Secretary Scott Bessent said on May 18 that tariff rates would rise to levels Trump threatened on April 2 if countries fail to reach trade agreements during the 90-day pause. Vietnam, where the bulk of athletic performance footwear is produced, concluded a second round of tariff talks in Washington last Thursday on the Bilateral Agreement on Reciprocal Trade between Vietnam and the U.S. According to a May 22 statement from Vietnam's Ministry of Industry and Trade, the two negotiating delegations—led by Vietnam Minister Nguyen Hong Dien and U.S. Trade Representative Ambassador Jamieson Greer—'made positive progress,' identifying issues of agreement and reaching consensus on matters that need further discussion. The two sides also set time frames for feedback on the draft agreement, proposed text, and organized online meetings to prepare for the next negotiation session in early June 2025. Best of WWD All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos] Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
Shoe Prices Sank in April, the Sharpest Drop in 21 Months, Despite Uncertainty Around Tariffs
Shoe prices sank in April in tandem with overall inflation, according to the latest data from the Footwear Distributors and Retailers of America (FDRA). In April, retail footwear prices slid 1.3 percent from a year ago, the sharpest drop in 21 months and second steepest in more than four years, the FDRA noted. This comes as prices dropped 2.9 percent year-over-year for children's shoes, the most in more than four years, and a 1.5 percent decline in men's footwear, the most in 21 months. Women's shoe prices declined a modest 0.6 percent but is still lower than seven of the last nine months. More from WWD Parisian Footwear Label Christen Makes Physical Retail Debut at Bergdorf Goodman EXCLUSIVE: Favorite Daughter Launches Kitten-Heel Sandal and Sneaker With Dr. Scholl's for Summer U.S. and China Hit 90-day Pause on Tariffs, Begin Trade Negotiations Gary Raines, chief economist at FDRA, told FN that over the long term, year-over-year percent changes in retail footwear prices tend to move in step with year-over-year percent changes in duties paid on footwear imports. 'Echoing our caution last month, the problem is that duties paid on footwear imports in the latest month surged the most in years, while retail footwear prices declined,' Raines said. 'This divergence suggests someone along the supply chain is eating that cost differential and losing margin. This notion supports anecdotal evidence heard from several across the industry.' This movement in shoe prices comes one day after the United States and China issued a joint statement on their agreement to substantially lower tariff rates. Starting on Wednesday, U.S. tariffs on Chinese imports will be 30 percent, down from 145 percent, while China's duties on American imports will be 10 percent, from 125 percent. The parties plan to continue with talks over the 90 days that hopefully will lead toward a new trade agreement. But while the U.S.-China tariff pause is a step in the right direction for fashion, footwear and retail, there's still more that needs to be done in terms of trade deals to ease the tax burdens. That's the consensus from fashion and retail trade groups, which said on Monday that they continue to push for better trade deals over the long haul that protect American firms and consumers. Last month's drop in retail footwear prices also comes at the same time the Bureau of Labor Statistics reported that overall inflation slowed even further in April. The bureau's latest Consumer Price Index (CPI), a broad measure of goods and services costs across the U.S. economy, saw prices increase 0.2 percent on a seasonally adjusted basis in April, after falling 0.1 percent the prior month. Prices were also up 2.3 percent over the last 12 months, after rising 2.4 percent in March. The bureau noted that the April change was the smallest 12-month increase in the 'all items' index since February 2021. Excluding volatile food and energy costs, the core CPI rose 0.2 percent in April and increased 2.8 percent over the same time last year. Best of WWD Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos] Crocs Collaborations From Celebrities & Big Brands You Should Know Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fashion United
07-05-2025
- Business
- Fashion United
Keen will not implement any tariff-related price increases in 2025
US footwear brand Keen, known for its outdoor shoes, has stated it will not implement any tariff-related price increases for the remainder of 2025. In a statement, the family-owned company said that in these unprecedented times, it has been 'monitoring the landscape and listening to its partners, fans, and community,' and is dedicating itself to 'lessening the impact in the areas it can control'. Rory Fuerst, founder and chief executive of Keen, wrote in an official letter to all its partners: 'We believe it's our responsibility to support our retail partners and fans through this period of uncertainty. By holding our prices steady, we aim to help you maintain strong consumer relationships and continue delivering the value and quality people expect from Keen. 'We recognise this is not a simple or easy choice in today's climate — but it's the right one.' Keen campaign Credits: Keen Keen said it continues to stand by a core belief, which is that 'when things get tough, you show up for the people who matter most'. It also explained that because its company is backed by a diversified supply chain, including owned manufacturing with a factory in the US, and proactive planning, it was 'fortunate to be in a position to absorb these impacts without passing them on to its community'. Keen's commitment to absorbing any tariff-related increases comes off the back of the Footwear Distributors and Retailers of America (FDRA), which represents Nike, Adidas, and Skechers, that stated the tariffs pose an "existential threat" to the footwear sector. It said that the tariffs could close footwear businesses, threaten jobs, lead to shortages for American consumers, and increase prices.
