Shoe factories across China and Southeast Asia have had their challenges this year, and more obstacles could be ahead as the competitive landscape is expected to heat up.
Data from some Asian shoe manufacturing firms, such as monthly sales reports, indicate that production has been slowing down. But that’s been expected due to adjustments and production shifts as footwear firms since April have had to adjust to reciprocal tariff uncertainties unleashed by U.S. President Donald Trump. What’s different now is that concerns over Trump’s tariffs and trade policy are largely in the rearview mirror — at least, for now.
Many countries now have set parameters in place for reciprocal trade agreements, the last one being China where Trump has promised not to raise tariffs at least through November 2026. And that one change involving China trade could result in another shift in the production landscape over the short term. It could mean that some Southeast Asian countries could see even fewer orders should brands decide to return some production to China.
“I’m hearing a lot of really competitive pricing options in China these days. Some [members] have said that they are historically competitive,” said Matt Priest, president and CEO of the Footwear Distributors & Retailers of America (FRDA). “As of now, the tariff rates on shoes from China are pretty much the exact same as those on shoes from Southeast Asia. This will definitely make our members look more closely at returning to China in the near and medium term.”
The FDRA CEO said he “wouldn’t put too much stock in monthly manufacturing reports right now,” given that it’s “such a strange time” and that some monthly data points could seem out of place but might still be fully aligned with trends over the full year. Priest was referring to the front-loading that some brands did to push delivery of product ahead of season in anticipation of higher tariffs, a move that would result in fewer orders in the back half.
Last month, Hong Kong-based Yue Yuen Industrial (Holdings) Ltd. said its footwear manufacturing of soles, components and other materials for the nine-month period ended Sept. 30 posted a 21.9 percent revenue drop in revenue to $275.6 million from $352.8 million last year. And on Tuesday, Feng Tay Enterprises Co. Ltd., a Taiwan-based producer of athletic shoes for brands that include Nike, said revenue for November was 7.16 billion in New Taiwan dollars, down 11.8 percent from year-ago levels. That’s not as bad as in May when revenue was 6.01 billion in New Taiwan dollars, reflecting a 23.4 percent drop from year-ago levels. Its best month thus far in 2025 was in February, when revenue hit 6.63 billion in New Taiwan dollars, or an 11.4 percent year-over-year increase.
In Cambodia, which has become a major global supplier for footwear brands that include Adidas and Timberland, there could be some uncertainty going forward. The nation picked up some of the production that had moved out of China.
The Cambodia Confederation of Investors Association a year ago predicted that orders for footwear and other items such as travel products would increase by 20 to 30 percent this year based back then on orders factories had already secured from brands. But the new wrinkle is the minimum monthly wage of $210 — up from $204 in 2024 — the Cambodian government approved in September for the Southeast Asian nation’s 1 million apparel, footwear and textile workers.
Shoe brands that produce in Cambodia, in addition to Adidas and Timberland, include Asos, Nike, Puma and Under Armour, among others. It wasn’t immediately clear which ones have in place signed collective bargaining agreements with the IndustiALL Global Union that would keep production in the country against the backdrop of higher wages. And for those that don’t have a labor union contract in place, whether they stay or pull back on some production elements could depend on just how competitive pricing can get from China’s factories.
The largest beneficiary of footwear firms moving out of China starting in 2019 during Trump’s first term when he began hiking duties on Chinese imports was Vietnam. The country is now the largest sneaker manufacturer, with Nike producing about 50 percent of its footwear there and Adidas at nearly 40 percent.
According to preliminary data from Vietnam’s General Department of Customs, footwear exports to the U.S. were $721 million in November, up 2.1 percent from $706 million in October — far better than the $611 million exported to the U.S. in September that reflected a 27.3 percent drop from the $840 million total in August.
A preliminary U.S.-Vietnam trade deal has set the reciprocal rate at 20 percent. On CEO Martin Hoffmann said during the firm’s second quarter earnings report that Trump’s tariffs has it paying a “40 percent” duty for US imports from Vietnam. That’s comprised of 20 percent reciprocal rate on top of the existing 20 percent tariff duty.
When the sneaker brand posted third quarter results earlier this month, Hoffmann said the timing lag between U.S. price increases and the full impact of additional U.S. tariffs led to a slightly positive margin effect in the third quarter, although he did caution that it should be considered a temporary benefit.
