Why Mnuchin’s Hint at a US-China Trade Deal Is a Turning Point for the Shoe Industry
Insiders say the shoe industry remains cautious — yet optimistic — about a possible trade deal following Treasury Secretary Steven Mnuchin’s recent hint that the two countries are close to resolving their yearlong tariff dispute.
In an interview with CNBC today, Mnuchin expressed confidence ahead of this weekend’s high-stakes talks between presidents Donald Trump and Xi Jinping. (The leaders of the world’s two largest economies are set to meet on the sidelines of the G20 summit in Osaka, Japan.)
Related stories
Why Exiting China to Avoid Tariffs Is Still Quite Costly
Neither Tariffs Nor Currency Fluctuations Can Touch Nike: Analysts
Why Trump's China Tariffs Will Hit Women Consumers Hardest
“We were about 90% of the way there, and I think there’s a path to complete this,” Mnuchin said. “The message we want to hear is that they want to come back to the table and continue because I think there is a good outcome for their economy and the U.S. economy to get balanced trade and to continue to build on this relationship.”
The comment marked a turning point for members of the shoe industry — many of whom have spent the last week gathered in Washington, D.C., for the seven-day public hearings on Trump’s additional tariffs on Chinese imports.
“We’re actually starting to see a couple of tea leaves out there that should give us hope,” said Matt Priest, president and CEO of the Footwear Distributors and Retailers of America, which represents more than 90% of the shoe industry in the U.S. “The Mnuchin quote is definitely at the top of the list of reasons for us to have positive hopes they will come to an agreement at some point. We’ve had negative news regarding trade with China since May… We’re somewhat encouraged — we have to be. We haven’t had these kinds of stories in the last six weeks.”
Priest, Steven Madden Ltd. CEO Ed Rosenfeld and fashion designer Marc Fisher were among the executives who testified before the Office of the United States Trade Representative within the past week about the proposed 25% levy on $300 billion worth of Chinese goods. (Early last month, Trump imposed a tariff hike of 25% on $200 billion worth of Chinese products, while Beijing retaliated with duties of 5% to 25% on $60 billion in U.S. imports.)
During the hearings, hundreds of companies — including retailers such as Macy’s and JCPenney — argued that the fourth tranche of tariffs would have a negative effect on the U.S. economy and can lead to widespread worker layoffs on top of increased prices for American consumers.
“I think the administration is walking this fine line of having something short-term, impactful and creates leverage for negotiation and wanting to actually achieve a negotiation,” Priest explained, “or extending this in perpetuity and then really harming the U.S. economy going into the election year.”
Watch the highlights at the 2018 FNAAs.
Want more?
What Shoe Leaders Are Saying About Trump’s Proposed China Tariffs
Inside Footwear Executives’ Powerful Testimony at Trump’s China Tariff Hearings
Here’s How Much More Your Ugg Boots and Nike Sneakers Could Cost Thanks to Tariffs
Sign up for FN's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
