U.S. shoemakers face losses amid China, U.S. trade tension
Jeck Deocampo • September 18, 2019 • 178
Shoemakers in the United States are facing losses over the tit-for-tat tariffs amid the trade tension between China and the U.S.
Xero Shoes is an American brand of lightweight minimalist footwear designed for walking, running and athletics. According to Steven Sashen, CEO of the company, their shoes and sandals have thin and flexible soles that are contoured to the shape of the human foot.
“It really reflects the essence of what we’re doing, which is something so lightweight, so minimalist, so barely there that you don’t know that it exists,” said Sashen.
Sashen started the company with his wife Lena Phoenix 10 years ago. Their 80-percent online business has taken off with 84-percent growth in the past four years.
Yet as another round of U.S. tariff took effect from early September, Sashen’s products are now 15 percent more expensive to import from China, where all of his shoes are made.
Lena Phoenix, co-founder of Xero Shoes, says one possible solution is to uproot their supply chain. Yet such move would take time and it isn’t as easy as it sounds.
“We don’t want to leave China. Moving factories is very dangerous for a company of our size,” said Phoenix.
“People just say very casually: well why don’t you move to Vietnam for example? Well, cause Vietnam is full. They’re overcapacity already,” said Sashen.
They’ve also thought about raising shoe prices in response to the tariff.
“While we have a rabid fan base and many people say we’re happy to pay a few dollars more. That’s what people love to say, but when push comes to shove, people are very price-conscious,” said Sashen.
“We’re going to hold prices as long as we can,” said Phoenix.
Sashen and Phoenix are not the only ones facing such dilemma. Xero joined forces with about 200 other footwear companies to write to President Trump last month, urging him to cancel the newly planned additional tariffs on goods imported from China.
The letter points out that the tariffs on footwear products imported from China are already at a high level of 11 percent on average, and will reach 67 percent on some shoes after the new tariffs take effect.
According to the letter, the 15 percent tariff will cost U.S. shoe consumers an additional four billion U.S. dollars every year, which may create further economic uncertainty.
“It’s almost impossible to come up with a coherent strategy because of how in flux all of this is,” said Sashen.
Xero is now trying to come up with a long-range manufacturing plan.
“It forces you to step out of your comfort zone and be innovative and thoughtful about how to go forward long-term,” said Michael Wellman, the vice president of the company’s Asia Pacific Development.
Meanwhile, the shoe-makers are also hoping for near-term relief for the footwear industry, which was relatively highly taxed even before the trade war picked up speed.
“There’s a part of me that’s still in denial, that hopes that it’s going to be resolved next month,” said Phoenix. (REUTERS)
Hong Kong protesters threw petrol bombs and police fired tear gas in street battles across the city on Tuesday (October 1), posing a direct challenge to Chinese President Xi Jinping on the 70th anniversary of the founding of the People’s Republic.
In the New Territories town of Sha Tin, police fired tear gas canisters directly at high-rise windows, though it was not clear why, as the Chinese-ruled city was gripped by the most widespread violence in nearly four months of unrest.
Police said “rioters” had used corrosive fluid in Tuen Mun in the west of the New Territories, “injuring multiple police officers and reporters”. No details were immediately available.
The Chinese-ruled territory has been tense for weeks, with protests often turning violent, as authorities scramble to avoid activists spoiling Beijing’s birthday parade at a time when the central government is already grappling with a U.S.-China trade war and a slowing economy. i
Violent clashes ensued as Hong Kong riot police break up protesters with force on Tuesday (October 1) while China celebrates its 70th anniversary National Day.
China celebrated its growing power and confidence with a big display of military hardware and goose-stepping troops in Beijing on Tuesday, overseen by President Xi Jinping who pledged peaceful development on Communist China’s 70th birthday.
The event is the country’s most important of the year as it looks to project its assurance in the face of mounting challenges, including nearly four months of anti-government protests in Hong Kong and an economy-sapping trade war with the United States.
The former British colony was in lockdown on Tuesday with barricades in the city centre, shuttered stores and a heavy police presence. Embattled Hong Kong leader Carrie Lam is in Beijing for the anniversary celebrations. (REUTERS/EPA)
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