Walking Shoes Trade War With China Could Force Sneaker Makers To Shift Production

Makers of athletic footwear, one of the main products targeted for U.S. tariffs against China are already planning to shift production elsewhere should efforts to avert a trade war fail.

The manufacturers, in Atlanta for the final day of a big sporting goods trade show Monday, also said the major loser in a trade war would be the U.S. consumer, who would quickly have to pay more for sneakers, cleats and cross-training shoes.

There was some uncertainty among exhibitors at the Super Show over precisely which sporting goods would be affected by the threatened U.S. sanctions, though many felt the $7.9 billion athletic footwear business, which depends heavily on Chinese imports, was likely to be hit.

“We’re not letting all our eggs be in the same basket. If we have to we could shift production to Indonesia, of course not overnight,” said Alain Ronc, president of Nashville, Tenn.based Mitre Sports International, a leading producer of soccer equipment, including shoes.

Ronc said most U.S. footwear companies rely on China for about half of their production. He said most probably have contingency plans and there would likely be a rush to increase production at the alternate sites.

“There’s a certain homogeneous situation in the industry. We all get product from the same places,” he said. “The consumer would see higher prices and a problem of servicing the market. … Everyone’s going to scramble for the same places.”

Tom Cove, director of government operations for the Sporting Goods Manufacturers Association, said the proposed 100 percent tariff was limited to certain specific footwear styles such as women’s models and some jogging shoes. That should make it easier for companies to adapt, he said.

“In the past they’ve looked at much larger categories,” Cove said. “We’re kind of glad it’s not as wide as a group.”

Cove said the sporting goods industry in general supports efforts to combat Chinese piracy, the main reason for the proposed tariffs.

Jon Bobbett, managing director of Champion Footwear of Tarrytown, N.Y., said he doubted many shoe companies were taken unaware by the Clinton administration’s weekend threat to impose 100 percent tariffs on $1.08 billion worth of Chinese products. The United States and China agreed Monday to resume talks next week in Beijing in hopes of heading off a trade war.

“This has been brewing quite a while,” said Bobbett, whose company is a licensee of apparel maker Champion.

The company is contacting plants in Indonesia, the Philippines and Taiwan to pick up the slack, should imports from China get too expensive, Bobbett said. “We’re already set up to do that.”

“We’ve definitely done our research,” said C.J. Collins, director of soccer products for Brockton, Mass.-based footwear maker Puma USA. “We’d be able to react.”

Collins said virtually all of Puma’s low-priced models are made in China.

Some footwear makers said the costs of disrupting production would be passed to U.S. buyers.