Shoemaker Steve Madden is taking steps to adjust to President-elect Trump's proposed tariffs, which could lead to higher prices for consumers if retailers choose to pass on the added costs. The company is planning to import fewer goods from China to the U.S. and is looking to diversify its imports by sourcing items from alternative countries such as Cambodia, Vietnam, Mexico, and Brazil.
During an earnings call, Steve Madden's CEO, Edward Rosenfeld, explained that the company has been working on a plan to reduce its reliance on Chinese imports for some time. Rosenfeld highlighted the efforts made over several years to develop a factory base and sourcing capability in different countries to prepare for a potential scenario where goods needed to be moved out of China quickly. As part of this strategy, the company has already begun implementing the plan by reducing the percentage of imports from China, which currently stands at over 70%, with a goal of cutting it by 40%-45%.
President-elect Trump's proposal includes a 60% tax on imports from China and a universal tariff of 10%-20% on imports from all foreign countries. The National Retail Federation estimated that if these tariffs are imposed, consumers could end up paying billions more for footwear, potentially leading to a significant decrease in spending power for Americans annually while the tariffs are in effect.