Impact of Trump's Proposed Tariffs on Fashion Apparel and Footwear Industry

By Alan Miklofsky, November 14, 2024

With the potential for significant tariff hikes on imports under Trump's proposed second-term policies, the apparel and footwear industries are likely to see increased costs that could substantially affect consumer pricing, industry sourcing strategies, and overall market dynamics.

Key Impacts:

1. Price Increases for Consumers

Proposed tariffs, including a general import tariff of 10%-20% and additional tariffs on Chinese goods of up to 100%, are expected to lead to substantial price hikes:

- Apparel: Estimated increases could range from 12.5% to 20.6%, meaning, for example, an $80 pair of jeans might rise to $90-$96, and a $100 coat could cost $112-$121.

- Footwear: A $50 pair of athletic shoes may see prices increase to $59-$64. Double that for a $100 pair. Triple those figures for a $150 pair.

2. Shift in Sourcing and Production

Many companies, including Steve Madden, are proactively reducing reliance on Chinese manufacturing, looking instead to countries like Cambodia, Vietnam, Mexico, and Brazil. By diversifying production locations, brands aim to mitigate the direct impact of tariffs on Chinese imports.

3. Reduced Consumer Spending Power

Higher costs in essential categories—such as apparel, footwear, toys, and household goods—could cut U.S. consumer spending by an estimated $46 billion to $78 billion annually, potentially slowing economic growth and affecting consumer spending patterns.

Key Takeaways:

- Increased Prices: Consumers should anticipate higher prices for fashion apparel and footwear if tariffs are implemented, which could affect demand and purchasing behaviors.

- Supply Chain Diversification: To navigate these proposed tariffs, apparel and footwear brands are likely to further diversify sourcing and manufacturing bases outside of China.

- Economic Ripple Effect: Reduced spending power due to higher prices across consumer goods could have broader implications, including economic slowdown and shifts in retail strategies to balance costs and consumer demand.

Sources:

1. National Retail Federation: Trump’s Tariffs Could Cost Americans $78 Billion Annually in Spending (https://nrf.com/media-center/press-releases/trump-tariff-proposals-could-cost-americans-78-billion-annual-spending)

2. NBC Washington: Trump’s Tariffs Could Trigger Dramatic Price Spikes on Clothes, Furniture, Warns Retail Group (https://www.nbcwashington.com/news/business/money-report/trumps-tariffs-could-trigger-dramatic-price-spikes-on-clothes-furniture-warns-retail-group/3758298/)

3. AP News: Steve Madden to Cut Goods Imported from China by Up to 45% (https://apnews.com/article/9df8a62a4b7552b1702ac3649dcab5f1?utm_source=chatgpt.com)

Alan Miklofsky is a seasoned business consultant and former shoe retail chain owner with over 40 years of experience. He served as a board member and Chairperson of the National Shoe Retailers Association, bringing industry insights to retailers navigating today's challenges. Alan continues to contribute to the industry through consulting, speaking engagements, and published works.