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Nike, Adidas Beg Trump: Please, No Tariffs

shoeretailers 052119 lt

Nike Inc. (NKE), Adidas AG (ADDYY.PK,ADDDF.PK) and other footwear companies have urged U.S. President Donald Trump to reconsider his proposed tariffs on shoes imported from China, noting that any increase in the cost of importing shoes has a direct impact on the American footwear consumer.

In a letter to Trump, more than 170 footwear companies have urged the President to immediately remove footwear from the proposed tariffs.

"The proposed additional tariff of 25 percent on footwear would be catastrophic for our consumers, our companies, and the American economy as a whole," the companies said, noting that the industry faces a $3 billion duty bill every year.

Earlier this month, the Trump administration hiked tariffs on about $200 billion worth of Chinese-made goods to 25 percent from 10 percent. Trump has also initiated a formal process to raise tariffs on essentially all the remaining imports from China, which are valued at about $325 billion, including footwear, toys and other consumer products.

The footwear industry's trade association, the Footwear Distributors & Retailers of America or FDRA, estimates that the proposed tariffs will cost U.S. customers an additional $7 billion each year.

Noting that footwear is a very capital-intensive industry, the companies said they are trying to shift production out of China. However, they also added that sourcing decisions require years of planning and companies cannot simply move factories to adjust to these changes.

While 18 percent of Adidas' footwear was sourced from China in 2018, 26 percent of Nike's footwear was manufactured in that country, indicating that China continues to remain an important sourcing country and a key link in the supply chain for these companies.

"Your proposal to add tariffs on all imports from China is asking the American consumer to foot the bill. It is time to bring this trade war to an end," the companies said in the letter to Trump.

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