Nike shoes are seen displayed at a sporting goods store in New York City, New York, U.S., May 14, 2019. REUTERS
(Reuters) – The Footwear Distributors & Retailers of America trade group (FDRA) urged U.S. President Donald Trump to exempt shoes from reciprocal tariffs in a letter signed by makers including Nike (NKE.N), Adidas America and Skechers (SKX.N).
WHY IT’S IMPORTANT
The FDRA letter, dated April 29, was signed by 76 footwear companies such as Deckers Brands (DECK.N), Capri Holdings, Under Armour, and VF Corp
The trade group said that the industry already faces significant levies, including children’s shoes, which often have rates of 20%, 37.5%, or higher, before accounting for the new tariffs.
CONTEXT
President Trump had imposed broad-based tariffs on goods from major U.S. trading partners, potentially leading to a rise in prices.
Trump had instituted sweeping tariffs in early April, including 145% tariffs to imports from China.
China’s Commerce Ministry said on Friday that Beijing was “evaluating” an offer from Washington to hold talks over Trump’s crippling tariffs.
Adidas, on Tuesday, held back from raising its 2025 financial forecasts despite strong first-quarter results, citing the uncertainty around U.S. import tariffs.
Similarly, Skechers also withdrew its annual forecasts, citing the Trump administration’s erratic trade policy.
KEY QUOTE
“Given the nature of the U.S. footwear industry, American footwear businesses and families face an existential threat from such substantial cost increases. Hundreds of businesses face the prospect of closure,” said the letter.
WHAT’S NEXT
The letter asks for “a more targeted approach, focused on strategic items rather than basic consumer goods.”
Reporting by Neil J Kanatt in Bengaluru; Editing by Alan Barona
