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Rising Tariffs Impact Sneaker Industry, Hurting Small Businesses and Consumers
Devlin Carter established SIA Collective, his upscale sneaker company, six years ago, transforming it into a multimillion-dollar brand by offering trendy, premium footwear largely produced in China. However, tariffs imposed by the prior administration have escalated the price of importing goods from numerous countries, including China, into the United States.
This situation has deeply frustrated Carter.
“Ridiculous Tariffs”
“These are ridiculous tariffs that are senseless,” Carter stated. “Small businesses like mine are forced to bear the burden of these tariffs, and it’s a substantial amount. It’s impossible to view this as beneficial for anyone.”
Sneaker Industry Faces Challenges
The sneaker sector represents a $70 billion annual market. With domestic sneaker production being minimal, recent tariffs have sent shockwaves through the industry and the global economy. Carter warns this creates a domino effect that imperils the future of numerous smaller sneaker enterprises.
“And it’s completely needless,” he added.
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Nike and Other Major Brands Affected
The repercussions extend beyond independent producers like Carter. Even industry giant Nike is grappling with these challenges. A significant portion of Nike’s manufacturing occurs in Vietnam and Taiwan, which have been subjected to tariffs of 46% and 32% respectively on goods entering the U.S.
Economist Peter Schiff noted on social media platform X that establishing production facilities in the United States would be more expensive for Nike, based in Oregon, than absorbing the tariffs. “The consequence will be fewer sneakers available in the U.S. at considerably higher prices,” he predicted.
Public “Pain Threshold” Questioned
During a press briefing, a reporter questioned the prior president about the American public’s “pain threshold” concerning the tariff repercussions. The president dismissed the query, stating, “I think your question is so stupid… I don’t want anything to go down. But sometimes you have to take medicine to fix something.”
Impact on Small Businesses Like SIA Collective
The tariffs pose a threat to broader economic stability and particularly impact small business proprietors like Carter. His business heavily depends on shipments from nations like China, where 90% of his shoe production takes place. His footwear typically retails for around $220 per pair, he explained.
“If the manufacturing cost for a pair of shoes in China is $100,” he illustrated, “tariffs inflate that cost to $150 or more. It’s unnecessary and it shouldn’t happen.”
He elaborated that calculating the tariffs across his total shoe production volume “results in a large sum. The typical response is to transfer the additional cost to the consumer. Even a partial cost sharing arrangement can strain consumers already experiencing apprehension due to broader governmental actions that erode consumer confidence.”
Carter worries this uncertainty could lead to decreased sneaker sales. Before tariffs were implemented, his company shipped over $2 million worth of sneakers.
Luxury Goods Market Sensitive to Economic Anxiety
“People purchase my shoes because of their appeal, but they are a luxury product,” he clarified. “I’m unsure how many of my customers are concerned about potential job losses. They might prioritize essential spending like groceries, anticipating a potential recession and cutting back on discretionary purchases. Economic and job insecurity triggers a ‘survival mode’ mentality, where spending is curtailed, ultimately harming small business owners.”
Consumer Behavior Shifts Due to Price Increases
Earl West, a self-proclaimed sneaker enthusiast with a collection exceeding 1,800 pairs stored at his Atlanta residence, anticipates a slower growth in his collection due to tariff-driven price increases.
“A pair of sneakers previously priced at $180 will now cost $250,” West noted. “This necessitates greater selectivity in my purchases, as spending $250 on sneakers every other week—a common practice for collectors—becomes unsustainable. We buy for collecting, not resale.”
West had pre-planned his annual sneaker acquisitions, a schedule now disrupted by the tariffs.
“In certain instances, I will simply forgo purchasing the shoes,” he admitted. West frequently bought from retailers in the United Kingdom, Germany, and Hong Kong. “But tariffs now apply to all these regions, severely hindering international procurement. Increased shipping costs, potentially doubling from $60 to $120, coupled with the shoe’s price, makes these purchases prohibitive.”
Resellers Also Affected
Sneaker resellers are also experiencing adverse effects, West added.
“Consider this: as a reseller, acquiring a $150 shoe at an inflated price reduces profit margins. Subsequently, selling at an even更高 price to maintain profitability poses a significant challenge,” he concluded. “This creates a real dilemma.”