If footwear firms thought 2025 would be challenging under a new presidential administration, they weren’t wrong.
The year was fraught with many competing concerns and much uncertainty, mostly due to U.S. President Donald Trump’s reciprocal tariffs and trade policy. That unleashed a chain of events impacting business planning throughout the year.
There were lessons to be learned, and companies that were nimble had the ability to zig and zag as needed.
Tariffs and trade policy
Footwear firms were prepared for a hike in China duties in 2025 knowing that tariffs appears to be Trump’s favorite word, given his election last November as the 47th President of the U.S. and his China trade policy when he was No. 45. But no one was prepared for the kind of reciprocal tariffs that were announced on April 2.
Those tariffs started at 34 percent on China and 46 percent on Vietnam, where most athletic performance sneakers were made, spelling big trouble for shoe brands. And the duties were on top of existing ones. Footwear firms were left scrambling for options, and those already in partnership with factories around the world were the ones able to flex and move production as needed.
The summer was a nail-biter as Trump threatened even higher tariffs around the world if countries failed to negotiate new trade deals with the U.S. The shoe industry finally got a respite late summer when the parameters for many new trade deals — final negotiations are still pending — were disclosed. Footwear firms even got a holiday gift from the Trump administration in the form of a one-year hold on any additional China tariffs on imports to the U.S. As disclosed in October, the new tariff rate for footwear was down to a range of 20 percent to 27 percent, depending on shoe classification and not including existing duties.
At least for now, businesses have concrete numbers to work with as they finalized their 2026 business plan.
Sourcing and supply chain
The lesson learned in Trump’s latest tariff round is to be as nimble as possible — while one never knows what he’s going to do next, there are also market issues to consider.
Some shoe firms didn’t have the option of moving production out of China, especially when inputs are also locally sourced. And with Vietnam as the sneaker production capital, that specialized expertise limits where else brands can go for athletic performance shoes. Moreover, with factories in countries such as Cambodia, India and Indonesia, as well as Mexico, already busy with existing customers, finding a facility that could add new production to their schedule wasn’t something that could be done with just a snap of one’s finger. What some brands did was to keep production in China, selling those goods to other markets where American tariffs are not a concern. That also paved the way for higher prices in the U.S.
Shoe brands with an existing global sourcing network were the ones able to move production out of China early in the year, although some later moved back into the Asian nation once there was a better understanding of tariff rates. Steve Madden Ltd. CEO Edward Rosenfeld said in May that the firm was cutting production in China and had already moved work to other factory partners. Crocs Inc. CEO Andrew Rees said during his firm’s earnings conference call that the “daily uncertainty as to the level of these tariffs makes it incredibly hard to plan and predict both short- and long-term impacts to our business.”
Once the outlines for reciprocal trade deals with different countries were in place, some of the pressure eased for the shoe brands, especially once the U.S. and China set parameters for a new trade deal in October. The terms of those parameters also raised the question about whether shoe supply chains could be reshaped once more.
Some brands are jumping back in and producing from China again. And given the competitive pricing coming out of China, shoe factories in China and Southeast Asia are competing for orders — a move that now guarantees a change in the supply-chain game again.
The sourcing lesson here is that it isn’t just tariffs that could force change. A back-up plan is alway a good thing to have at the ready for the you-never-know just-in-case scenario. One example is Bared Footwear, where 40 percent of its outsoles were from Natural Fiber Welding (NFW), a firm known for its sustainability. But NFW ceased operations in early September.
Bared founder Anna Baird was able to obtain the remaining outsoles in NFW’s inventory, enough to last for a year. But now she’s looking to find alternative options that still provide the same sustainability features, and is transitioning to other bio-based materials such as Tenera, a 100 percent bio-based footbed. She’s also exploring Phase Four Orthotics, and Plastazote footbeds, a form of orthotic insoles made from medical-grade foam that molds to one’s feet for shock absorption and pressure relief.
Artificial Intelligence
Shoe firms are adopting AI tools and making sure they don’t get left behind.
Nike Inc. in October reinforced its market leadership by giving its app a refresh that puts sport first again. The new app relies on enhanced AI tools to personalize the customer experience, making product search easier and with the help — if needed — of a conversational shopping assistant. In June, the brand surfaced a new women’s sneaker Astra Ultra, which featured shapes and patterns created by generative AI.
Kane Footwear last month signed its first AI Athlete via a partnership with Yeti Boo, adding the AI internet personality to its Kane Athlete roster. Also known as the AI Yeti, the news was shared on Instagram featuring a video of Yeti and a series of photos of him modeling the Kane Revive AC shoe.
Golden Goose entered AI territory when the luxury sneaker brand partnered with Google Pixel and Google’s Gemini AI to add a high-tech, digital component to its co-creation program. The co-creation concept is a key customer-journey tool for the brand, allowing them to ask for ideas on their co-created sneakers. The experience is available at 44 Golden Goose stores globally.
Inflation
Shoe prices dipped slightly in November, sliding a modest 0.1 percent year-over-year, according to data from the Footwear Distributors and Retailers of America (FDRA). Prices had been rising in recent months, but this time children’s footwear were the catalyst behind lower shoe prices in November, falling 3.4 percent from 12 months earlier and representing the steepest drop since February 2021. However, excluding children’s footwear prices, total retail shoe prices would have risen for the fifth straight month in November, FDRA said. In fact, the trade organization expects shoe prices to go up as the average landed cost and average duties per pair on footwear imports continue to climb.
Shoe prices were already climbing by late spring as brands and retailers were dealing with Trump’s tariff policies. In June, Nike raised U.S. retail prices on higher-price sneakers, although the Jordan brand and Nike kids apparel and footwear didn’t see any increases. Footwear price between $100 and $150 saw increases up to $5 and those starting at $150 and higher saw increases up to $10.
Most shoe brands — such as Madden and Birkenstock — kept their promise of doing only “surgical” price increases in 2025, keeping those hikes for only select shoe styles. With the expectation of average landed costs and duties, more price increases could be likely.
Inflation continues to be at the forefront of consumers’ concerns. The Conference Board’s Consumer Confidence Index for December fell to 89.1 from 92.9 in November. Of the two components, the Present Situation Index fell 9.5 points to 116.8 in December, while the Expectations Index — the short-term outlook for income, business, and labor market conditions — held steady at 70.7.
The Conference Board’s chief economist Dana M. Peterson noted that consumers’ write-in responses on factors impacting the economy “continued to be led by references to prices and inflation, tariffs and trade, and politics.”
