The American shoe company Steven Madden will cut nearly half of its China production within the next year as it braces for tariffs under a second Trump administration.
The retailer, best known for accessorizing teenagers across the United States, told Wall Street analysts on Thursday that it took action as soon as the election results were announced to brace for future tariffs on Chinese goods that President-elect Donald J. Trump repeatedly promised during his campaign.
“We have been planning for a potential scenario in which we would have to move goods out of China more quickly,” said Edward Rosenfeld, the Steven Madden chief executive, on a call following its earnings. “As of yesterday morning, we are putting that plan in motion.”
On the campaign trail, Mr. Trump pledged to do many things, some of which experts chalked up to bluster. But one thing they agreed on: When it comes to China and tariffs, Mr. Trump is not likely to waver.
The former president, who set off a scramble by global companies to move production out of China after his first election win in 2016, has promised additional 60 percent tariffs — or higher — on goods coming from China. He has also vowed to put tariffs of as much as 20 percent on all foreign-made goods in a bid to bring manufacturing back to the United States.
Mr. Rosenfeld said on Thursday that Steven Madden had been working to build up a factory base outside of China in places like Cambodia, Vietnam, Brazil and Mexico for several years.
But quitting China has proved tough to pull off. Even as Steven Madden has reduced its manufacturing in China, more than 70 percent of the company’s U.S. imports still come from there.
The company’s plan, Mr. Rosenfeld said, is that a year from now, about 25 percent of its business would be potentially subject to tariffs on Chinese products, Mr. Rosenfeld said.
“It is hard to move out of China,” said Bert Hofman, a former World Bank country director for China. “Most suppliers to companies such as Madden are based in China, thus it is easy to source there. Moving to another country for production adds complexity in terms of logistics, customs, and settling into a new country for production.”
As a result, higher tariffs will not necessarily mean that companies will move production to the United States.
“Companies will be forced to move,” Mr. Hoffman said, “not back to the U.S., but to countries that are best connected with the China-based suppliers.”
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