Good news could be ahead for shoe companies.
American President Donald Trump’s backing down on imposing a 100 percent tariff rate on Chinese imports beginning Nov. 1 — now that it appears China is willing to negotiate fairly at the bargaining table.
A framework on trade talks over rare earth minerals and fentanyl, plus an expected tariff extension, should bode well for firms.
Another 90-day extension for bilateral trade talks would leave the current temporary 30 percent tariff rate in place at least through Feb. 12. Of course, the extension could depend on how talks go between U.S. President Donald Trump and China’s Xi Jinping on Thursday when they are slated to meet face-to-face in South Korea.
Trump previously extended the 90-day pause in August. The first 90-day pause began in May. The second pause allowed footwear brands and retailers bring in more imports from China during the peak holiday shipping season — late August for early deliveries and mid- to late-fall for fill-ins and late season deliveries — at the reduced rate of 30 percent from 55 percent. However, duties for some items could have risen as high as 145 percent on Chinese imports to the U.S. if the pause had not been extended.
A new extension would allow shoe firms and retailers to bring in inventory for spring at the reduced rate. It also would give them some flexibility in where those shoes are produced, relative to other costs related to pricing as well as logistics concerns, such as on-time delivery.
Steve Madden Ltd. CEO Edward Rosenfeld told Wall Street analysts in August that while the firm had moved production out of China in anticipation of higher rates, the company returned some work for fall back to China in cases where it would be difficult to ensure on-time delivery, product quality and/or unreasonable pricing in an alternative country.
Over the weekend, U.S. Treasury Secretary Scott Bessent said during a “Meet the Press” interview on NBC News that the U.S. and China have a “framework” in place in connection to talks over the Asian nation’s threat place to put stiff export controls over its rare earth minerals.
Negotiators from the U.S., which include Bessent and U.S. Trade Representative Jamieson Greer, met with their Chinese counterparts in Malaysia over the weekend. The “framework” reportedly includes consensus between the two countries over export controls over rare earth minerals and an extension of the trade truce. The consensus also includes discussions over fentanyl. There are also reports that an agreement between the two is close over the sale of TikTok to the U.S. That would represent another “win” for Trump if the two can finalize a sale agreement, and it could do much to ease trade tensions between the two countries.
Rick Helfenbein, former chairman, president and CEO of the American Apparel & Footwear Association and now independent consultant, observed that there are incentives for both the U.S. and China to get a trade deal done. That’s because without rare earth minerals, the American economy would grind to a halt. And with an additional 100 percent tariff imposed on Chinese imports, China’s economy would be severely slowed.
But Helfenbein said there could be some “pleasant surprises” after the two meet on Thursday.
“The bigger surprise for footwear and apparel could be that the 20 percent fentanyl tariffs might be reduced, delayed, or even eliminated,” Helfenbein said. “If that were the case, then China sourcing — at around a 35 percent rate — becomes more viable and will cause US. importers to rethink, once again, their supply chains.
That would be great news for shoe firms. Shoe companies have been operating in the dark since Trump disclosed his plan for reciprocal tariffs in April. Without any clear guidance or path on where tariffs could go, many footwear companies for the better part of 2025 have relied on temporary pause rates as they plan out their businesses for the year. They need to start locking down plans for 2026, and any guidance or other component that could help with strategic planning and supply chain and sourcing would provide a boost to overall operations and margin strategy.
Separately, on Sunday Ambassador Jamieson Greer said the U.S. has reached reciprocal trade agreements with Malaysia and Cambodia, while securing “frameworks” for agreement on reciprocal trade with Thailand and Vietnam. The agreement with Cambodia sets the reciprocal tariff rate for most goods at 19 percent. The framework puts the reciprocal duty on Vietnamese imports at its current rate of 20 percent, which was set in July. Vietnam is a leading manufacturer of athletic performance shoes.
