Shoe Giant Cuts Ties with China as Trump’s Tariff Threat Looms

Clear Facts

• Shoe company Steve Madden plans to reduce its Chinese imports by up to 45% over the next year, following Donald Trump’s re-election.
• The company is exploring alternatives to Chinese imports, including sourcing from Brazil, Cambodia, Mexico, and Vietnam.
• Trump has proposed tariffs on Chinese imports that could reach as high as 60%, potentially impacting China’s economy significantly.

In a significant shift in its supply chain strategy, Steve Madden has announced a substantial reduction in its reliance on Chinese imports. This decision comes in the wake of Donald Trump’s re-election, during which he pledged to impose tariffs on Chinese imports that could soar to 60%.

Edward Rosenfeld, CEO of Steve Madden, revealed that the company has been actively seeking alternatives to its Chinese supply sources. He mentioned countries such as Brazil, Cambodia, Mexico, and Vietnam as potential alternatives.

“As of yesterday morning, we are putting that plan into motion,” Rosenfeld stated.

He further explained that the company aims to decrease the percentage of goods sourced from China by approximately 40% to 45% over the next year. This strategic move is part of a broader effort to mitigate the impact of potential tariffs on Chinese goods.

“Our goal over the next year is to reduce that percentage of goods that we sourced from China by approximately 40% to 45%,” Rosenfeld added.

This would mean that in a year’s time, only a little over a quarter of Steve Madden’s business would be exposed to these tariffs.

Trump’s firm stance on China has been a hallmark of his economic policy. In a recent interview, he discussed his approach to a hypothetical Chinese invasion of Taiwan, stating, “I would say: If you go into Taiwan, I’m sorry to do this, I’m going to tax you at 150% to 200%.”

During his first term, Trump had already imposed tariffs of up to 25% on Chinese imports.

The potential economic repercussions for China are significant. Zhu Baoliang, a former chief economist at China’s economic planning agency, estimated that a 60% tariff could slash China’s exports by $200 billion.

The International Monetary Fund (IMF) projects China’s economic growth to slow, with an expected expansion of 4.8% in 2024, which is at the lower end of Beijing’s target.

China’s yuan is sliding for the sixth consecutive week as investors grow anxious about potential tariff hikes following Donald Trump’s election win. The yuan had previously weakened by 5% after initial US tariffs in 2018, with an additional decline of 1.5% as tensions escalated.

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