US-China Trade Issues: The Battle for Footwear

Executive Summary

The US-China trade dispute has affected both countries: The volume of China’s exports to the US fell for five months in a row while US exports to China have slid eight months in a row. Here are some of the latest skirmishes:

• On June 1, China increased tariffs on 5,000 categories of US goods worth of $60 billion, in response to the US move to increase tariffs on $200 billion worth of Chinese goods
• China released a white paper outlining its position on June 2, a clear effort to show its unbending position.
• China remains a dominant supplier of footwear imported into the US, but with the ongoing exchanges of tit for tat tariff increases, we expect sourcing to shift to alternative sources such as Vietnam, Cambodia, Indonesia and Italy.
• Footwear brands are feeling the heat, as China offers an established base with infrastructure and manufacturing know-how difficult to replicate in other locations.