Home Blog Sneakernomics: The Election’s Potential Impact on Footwear Sales

The NPD Group Blog

Insights and Opinions From Analysts and Experts in More Than 20 Industries

Nov 10, 2016

Sneakernomics: The Election’s Potential Impact on Footwear Sales

Matt Powell, Vice President, Senior Industry Advisor ;

Apparel , Sports , Footwear

@NPDMattPowell

Donald Trump shocked the world on Tuesday night with his presidential win. His victory could have deep implications for the sports industry, and the footwear market in particular.

In Trump’s nomination acceptance speech at the Republican National Convention (RNC) in Cleveland last summer, trade was a prominent topic. While the GOP has traditionally been a party to support free trade and international trade deals, Trump’s position was for renegotiating the terms of key deals, and he widely supported tougher trade terms with China – the nation’s top sourcing market. China maintains its position as the largest supplier of footwear in the U.S., accounting for 66 percent of imports in 2014, according to the United States International Trade Commission (ITC). Any change between U.S. and China trade relations is likely to impact the footwear industry.

In particular, Trump indicated that he would eliminate multinational trade deals, specifically the Trans-Pacific Partnership (TPP), which involves the U.S. and 11 other countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam). Hillary Clinton, while she once favored this deal, later came to oppose it as well.  

The Obama Administration argues that TPP is meant to strengthen our relationship with the Asia-Pacific region and make it easier for American manufacturing and agricultural businesses, both big and small, to sell Made-In-America products abroad, by eliminating more than 18,000 taxes and other trade barriers on American products across the TPP countries (ustr.gov). According to the Footwear Distributors and Retailers of America (FDRA), TPP would “[provide] half a billion dollars in savings for footwear consumers and companies the first year of implementation and six billion dollars over the first decade.” These savings, says the organization, “will help facilitate 21st century innovation and job creation” in the industry.  

If the tariffs are eliminated or reduced under TPP, this increases the likelihood that footwear costs would be lowered and therefore retail prices could go down without sacrificing margin. Brands and retailers would sell more shoes and consumers would get a better deal. By keeping tariffs in place, however, it’s likely that prices would stay high and consumers may be more inclined to purchase fewer shoes.

Looking at U.S. footwear imports and exports, a key country on the TPP list is Vietnam. In 2014, U.S. footwear imports rose by $1.2 billion, or 5 percent, and most of this growth ($694 million) stemmed from low-cost imports from Vietnam, which grew at China’s expense, according to the ITC. Vietnam was also the #2 U.S. export destination for footwear in 2014, accounting for 10 percent of U.S. footwear exports and growing by 44 percent compared to the prior year.  

Canada is another influential country on the TPP list, and the point of view Trump put forth about NAFTA during the RNC, saying that he would renegotiate that deal, could have an impact here as well. Canada was the top U.S. footwear export destination in 2014, accounting for 17 percent of U.S. footwear exports and growing by 9 percent compared to the prior year. Trade policy changes between the U.S. and Canada could potentially have an impact on the footwear industry.    

While we don’t know how the international trade story will unfold, nevertheless it’s important for brands and manufacturers, in the footwear space and beyond, to begin to think about the various scenarios and implications the election may have on their businesses.


Stay current in your industry
SUBSCRIBE

Related Blog Posts


Back-Pedaling: Sales of Children’s Bikes Are Slowing
Back-Pedaling: Sales of Children’s Bikes Are Slowing

Decline in children's bike sales and a look at what can be done to change directions.

Sneakernomics: In the World of Market Research, Your Network is Your Net Worth
Sneakernomics: In the World of Market Research, Your Network is Your Net Worth

NPD Senior Industry Advisor, Matt Powell, shares his thoughts around the power of networking, as well as his personal LinkedIn and Twitter strategies

The Next Generation of Trends
The Next Generation of Trends

Inclusivity and transparency are two common Gen Z-based themes woven through the macro retail trends that are transforming the apparel industry today.

Sneakernomics: Athletic Footwear and Activewear’s Q1 Performance
Sneakernomics: Athletic Footwear and Activewear’s Q1 Performance

A series of headwinds dampened U.S. athletic footwear and activewear sales in the first quarter of 2019. In January, the 53rd week in last year’s retail calendar which was accounted for in January 2018 significantly impacted the comparisons; in February, the later and lower IRS refunds dampened results; and the later Easter affected March performance.

Subscribe to our blog

Newsletter

Subscribe and get key market trends and insights relevant to your industry each month.

We will not sell your information. View privacy notice.

Follow Us

© The NPD Group, Inc.