Shoe retailers push back against Trump’s China tariffs

Channel: Fox Business
Published: 05/21/2019

Description
Retail analyst Hitha Herzog on how the U.S.-China tariff battle may raise the price of running shoes. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street. Headquartered in New York — the busine...



Transcript
We have a 20 % tariff already. Another 25 would be a 45 percent tariff on $ 130 running shoe it's unaffordable, so we had to make a decision in january. We'Re de-emphasizing china we're still gon na, have an r & d center there and some small production capability, but the volumes going to vietnam and we'll add a third country that will name next year. Ok, did you do that math, you wrecked it up th ...
20 % tariff on footwear that brooks running ceo, jim weber referred to dates back to those two guys on your screen and 1930. Those two are two lawmakers by the name of i love these name: reid, smoot and willis holley. Those two together raise tariffs on20 or was it 30 30,000 imported goods coming into the us, and many say that extended and exacerbated the great depression of 1929? Those tariffs still in place for the footwear industry, so now shoemakers, footwear makers and sellers are well putting their foot down, urging president trump to remove footwear products from his latest tranche of tariffs, which would lead to an additional 25 % in duties and shoes and sundry Retail analyst hitha herzog joins us right now and a woman who loves a great pair of shoes. No doubt no doubt, especially when it comes to running shoes, yeah running shoes, but but you see what they're up against they already had for many years: 20 % tariffsand. Now, if they get the 25 % slapped on 45 percent, untenable we're talking about a pair of running shoes that maybe cause a hundred and $ 59 will essentially go up to somewhere run 195 pushing $ 200 right now, with these impending tariffs, this might cost a Family of four about $ 500 a year if it goes up it would go into the thousands and kids feet grow very quickly. Yes, very quickly. So one minute you got your kitten 2/7 and the next thing you know it's, oh wait! A minute! Eight and a half right, so here's what just so everybody knows what the footwear giants have done. They put their names on a letter and they havesent it to president trump, and we can show you some of this letter and it is strongly-worded. The letter to the president on the impact of a tariff hike on footwear, here's what they say - the proposed additional tariff of 25 % on footwear would be catastrophic for our consumers, our companies in the american economy as a whole and and folks.

I need you to listen to this part. There should be no misunderstanding. It is us consumers who pay for tariffs on products that are imported. It is an unavoidable fact. So what is also very interesting about this is, i think people are saying it's very easy for these companies to leave china to relocate their manufacturingthere countries like vietnam that are close by or you know, even a manufacturing in africa is very difficult to up and move Your manufacturing that quickly, in some cases it's taken years now, they're companies like under armour and nike that have been in the process of trying to move that manufacturing. But this takes a very long time. So this isn't something that could happen instantaneously so that these you know, companies like these footwear manufacturers can avoid the tariffs, and you know ostensibly pass that along to the consumer. This is gon na it's gon na overlap and the consumer is gon na end up paying for that. The who consumer chinese or us the us consumer. So i meanyes they're correct, like the consumer pays for the tariffs, but it comes in price hikes, so that gets translated into what we end up paying for those shoes for those accessories that are gon na get gon na get tariffs. But you know it's amazing, because jim weber of brooks running right saw the writing on the wall and said liz. We could not wait around.

We could not wait around to see how this trade war would play. They had to take a huge investment they're lucky that berkshire hathaway is their parent right. They had the cash flow and they had to move it took months yes to vietnam. Right - and you know he was - has the ability tosee around corners and that instance, what about the companies that are just you know, maybe starting out you know there are companies like all birds, for example, you know, or companies like that that are smaller, that have manufacturing In china, they can't just get up and move that quickly, yeah if they employ people here in the us, thousands of jobs we're talking about liz, okay, all right heetha. Thank you very much, keitha herzog, so that that was your lesson of the day. Smoot-Hawley. Those two guys, 30,000 different products with terra, slept on them back during the depression and many say it extended that the great depression. So we got to watch this very closely.


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