Turbulent times
The author of the World Shoe Review report says the global industry made some progress in 2024, but that the tariff turbulence of early 2025 has plunged the sector into anxiety again.
The start of President Donald Trump’s second term of office in January 2025 was a turning point for the world economy and for trade development, with most industries and countries affected. News headlines this year have been filled with the words ‘uncertainty’, ‘chaos’, ‘globalisation’, ‘off-shoring’, ‘on-shoring’, ‘near-shoring’ and the like. So, a summary of the global shoe industry in 2024 has to be placed in the context of how things are going in 2025 because 2024 could easily be named the PRETTY year (Pre-Trump Tariffs Year).
For footwear, there were probably two main hopes for 2024: to improve on the difficult year the industry experienced in 2023, and to take financial results back to pre-covid levels. These tasks were not easy given the ongoing conflict between Ukraine and Russia, and a growing fear in Central Europe, and increasingly in Western Europe too, of escalation, especially with President Trump threatening to withdraw US support. This geopolitical uncertainty (to which we must add the ongoing conflict in the Middle East) has only added to concerns about inflation, energy costs, supply chains and other perceived difficulties. Also, more than 50% of the world population lived in a country that was having an election in 2024.
Ups and downs
Despite these problems, the shoe industry was able to experience a more positive year with a rise in output compared to the negative 2023 results. In part, that was due to re-stocking. With regard to the second objective, though, there are still many instances of pre-covid results not being recovered as yet. Even a simple measure of population-to-shoe output would show this: the 2019 level of 2.86 pairs per capita dropped to 2.84 pairs in 2024.
Perhaps one of the most important developments in 2024 was the surge in imports to the US. Did this contribute to the protectionism the US administration has embraced now? Probably not. Imports into the US rose by 115 million pairs in 2024 or by 6.4% compared to the previous year. US consumption also went up, by 113.5 million pairs or 6.5%.
China was supposed to be moving from an export-based economy to a domestically focused economy. However, in 2024, a total of 8.2 billion pairs were exported by China, which is more than double the total amount for the next 10 leading exporters combined. This excludes exports that go through intermediary countries such as Belgium, the Netherlands, the UK, France and Germany as re-exports. While Vietnam, Indonesia, India and Cambodia have grown as footwear exporters, they still have a long way to go to catch China.
Nike had a difficult year which probably, on the surface, is surprising, as sport and athleisure have been strong movers, aided also by the move from formal to casual footwear, even for business and work. Adidas had its own problems with the gradual winding down of its Yeezy business, but the group bounced back in 2024. Up and coming brands such as On of Switzerland and Hoka, plus more established players such as Skechers, have also been success stories.
Tariffs and counter-tariffs
But back to the second Trump administration. In February 2025 promised tariffs began to be imposed by Trump, initially on near neighbours Canada and Mexico, plus China. The administration’s thinking was to protect and reinvigorate domestic manufacturing industries, to have a more equitable trade balance and to deliver a deterrent against illegal immigration and the flow of opioids into the US.
Of course, such an action was always likely to start a trade war that would spread globally with retaliatory moves. At the same time, it was always likely to affect the standard of living of most US citizens, although probably not the elites. From free trade (or existing, lower tariffs that were already in place) to additional tariffs with double- and triple-digit percentage figures was a steep rise. Non-profit economics research organisation the Peterson Institute has estimated a likely hit of $200 billion to the US economy under the Trump presidency, plus a rise in inflation.
China retaliated with targeted additional tariffs of its own, also with high-percentage increases on existing rates. But estimates suggested that the value of imports into China that this would affect would be a small fraction of the figure for exports from China to the US. During the first Trump administration, a two-year trade war with China began, with China agreeing in 2020 to spend an extra $200 billion on US goods as part of the negotiated settlement, but this plan was derailed by covid. China also said the 2025 US tariff increases breach the rules of the World Trade Organisation.
Industry concerns
As far as the shoe industry in 2025 is concerned, the the Footwear Distributors and Retailers of America (FDRA) has indicated its concerns.
As FDRA has pointed out, a sneaker that would have cost, say, $20 to produce in China plus $5 shipping cost, would be $50 at wholesale and $200 at retail. With double- or triple-digit tariffs, this could mean that a men’s luxury shoe from Italy could become cheaper than a standard sneaker from China.
A trade war also brings swings and roundabouts. While a tariff increase on China could help Brazil make gains in the US market, it could also see China flood other markets instead, including markets in Latin America that are also important for the industry in Brazil.
As to the question of reducing off-shoring, this has never really worked in the medium or long term. Companies including Clarks and Dr Martens have tried to bring some product back for on-shoring, but without tangible success. Having said that, a survey of US businesses found that 81% of executives thought they would like to try more on-shoring or at least near-shoring.
The US only produces footwear in small volumes and largely for niche markets, including military and safety. According to FDRA, there will be no saving of US jobs and even a possible loss of jobs as a result of the extra tariffs. Higher prices on footwear imports from China will impact on importers, distributors, retailers, as well as on the public. Alternative sources of supply such as Vietnam and Indonesia are still reliant on China for materials and components.
In May 2025, FDRA reported that 76 major brands, including Nike, Skechers, Crocs, adidas, Puma, VF, Wolverine and others, had pointed out the difficulties the tariffs will cause the footwear industry. Added tariffs will mean added costs that can neither be absorbed or passed on to hard-working, low- or medium-income families, the footwear brands have warned.
Spending power
Reduced customer spending as a result will not help the industry or the general economy. Furthermore, the measures will not drive footwear production back to the US in a hurry because it would take significant capital investment and years of planning to achieve that (even if the labour skills could be found).
For its part, the US Footwear Manufacturers’ Association (FMA) has suggested that income from the extra tariff levels (if enacted) should be used to stimulate the shoe supply chain. At present only 25 million pairs or so are being produced in the US. To take this even to 5% of the total would give a production level of 135 million pairs. There were some signs, FMA said, that established companies were re-investing in US production and some start-ups were appearing. It also said 50% of service personnel were wearing footwear from overseas. All boots for this segment should be made in the US, in FMA’s opinion.
No winners
The roller-coaster ride including a deferral of most tariffs until July has only added to the uncertainty. As there are no winners as things stand, there should be a fall-back to (say) just keeping a 10% tariff rate across the board.
If nothing else, this whole episode may have focused minds on how practical or not it is to produce locally, on the need for careful study of supply chain alternatives and on the need to avoid too much reliance on one manufacturing location.
The first half of 2025 showed some of these signs of volatility in the shoe sector. Skechers was taken over by 9G Capital, Dicks took over Foot Locker, Ecco and Lowa closed factories in Slovakia, while Nike had to make adjustments to its strategy.
Footnote: More detailed data on the global shoe industry in 2024 can be found in the author’s World Shoe Review.
A bounce-back by adidas was one of the industry’s success stories in 2024.
Credit: Adidas
