Adapting to Change: Steve Madden Cuts China Sourcing to Avoid Tariffs
A major footwear and accessories brand, Steve Madden, has made strategic moves to reduce its reliance on China for sourcing materials and products. This decision is prompted by concerns about potential tariff hikes under the new presidential administration. During an earnings call in November, CEO Edward Rosenfeld announced the company’s intention to decrease its imports from China by 40% to 45% within the next year.
Steve Madden’s current imports into the U.S. account for two-thirds of its overall business, with approximately 70% of these goods being sourced from China. The company’s proactive approach to mitigate potential tariff impacts involves diversifying its sourcing mix by developing factory bases and sourcing capabilities in countries such as Cambodia, Vietnam, Mexico, and Brazil.
This move by Steve Madden is part of a broader trend, as other U.S.-based manufacturers and retailers are also looking to shift their sourcing away from China due to escalating concerns about increased tariffs. The Biden-Harris administration recently implemented heightened tariffs on China-made products, and their predecessor, Donald Trump, had proposed significant duties increases on China-made goods during his campaign.
It’s important to note that the impact of this shift goes beyond China, as multiple countries could potentially be subject to increasing tariffs under the new administration. The CEO of Steve Madden, Edward Rosenfeld, expressed that it is too early to speculate about the specific impacts of the incoming administration’s trade policy, but he expects “wide-ranging implications” for the supply chain and overall economy in countries from which the company sources.
This strategic shift by Steve Madden reflects the complex and evolving landscape of global trade relations and tariffs, highlighting the importance for businesses to adapt and diversify their supply chain strategies to navigate these challenges effectively.
Source: https://www.supplychaindive.com/news/steve-madden-slashes-china-sourcing-avoid-tariffs/732583/
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