Vicki M. Young
8 min read
In This Article:
In another twist and turn in President Donald Trump’s trade war, the U.S. and China have revealed the framework for a new deal that would see much lower-than-expected tariffs — if it comes to fruition. So where do footwear firms go from here?
The truce would see the tariff rate on China imports to the U.S. set at 55 percent. Negotiators have until Aug. 10 to fine-tune the deal’s terms. (Right now, during a 90-day period, the tariff rate stands at 30 percent.) The agreement still requires the approval of both U.S. President Donald J. Trump and China President Xi Jinpin.
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With the 90-day pause in effect through Aug. 14, many goods that can be brought in early have already been shipped and received or are on their way.
Late August and early September is when the bulk of the merchandise for the holiday season typically arrives in U.S. ports. Goods exported on Aug. 14 or thereafter would be subject to the higher rate. But there could be minimal impact this year if most merchandise were already pulled forward, leaving new items coming in limited to fill-ins as companies replenish or chase sales.
There still could be some additional price increases on select shoe styles later in the year. As for 2026, there’s enough time for companies to plan ahead to minimize tariff risk next year, and many already have plans to further minimize China sourcing by yearend.
Public footwear firms for the most part have pulled back on future earnings guidance due to tariff uncertainties. And any mention of guidance has reflected current tariff rates on a presumption that they would last for the back half of fiscal 2025, or 10 percent globally, with the exception of China at 30 percent. Many also moved with quick speed to shift their sourcing strategies, further limiting future impact from tariff increases — at least for this year.
In a conference call to Wall Street on Tuesday after posting first-quarter earnings results, Academy Sports + Outdoors CFO Carl Ford said the company pulled forward $85 million in domestic inventory receipts in the first quarter at pre-tariff prices. He said the company also partnered with factories and overseas suppliers to reduce costs, and cut back on over $120 million in inventory receipts so it has flexibility later in the season to possibly chase sales. The specialty chain also shifted production out of China to other countries, such as Cambodia and Bangladesh, which currently have a tariff pause rate at 10 percent through July 9.
