Shoe retailers are stepping into the trade war as many footwear brands are warning President Donald Trump of the potentially “catastrophic” effects tariffs could have on consumers.
“From where I’m sitting, this is a bit like Herbert Hoover’s policies on steroids. Because we’ve been struggling with these kind of tariffs significantly since the 1930s,” Peter Bragdon, Executive Vice President and Chief Administrative Officer at Columbia Sportswear Company, recently told Yahoo Finance’s “The Ticker.”
The Smoot-Hawley Tariff Act, enacted in June 1930, increased U.S. import tariffs on foreign agricultural products and manufactured goods. At the time, many economists urged Hoover to veto the legislation and some historians blame it for worsening the Great Depression.
“I think the biggest concern is the uncertainty that these costs increase drive into our supply chain and ultimately to our consumers,” said Matt Priest, CEO and President of the Footwear Distributors and Retailers of America. “We already pay $3 billion in duties a year.”
Last month, shoe industry leaders joined forces and sent a letter to Trump urging him to end the trade war with China. Nike (NKE), Columbia Sportswear (COLM), and Adidas (ADDYY) were among the brands standing behind the message.
Bragdon also explains how mounting trade tensions between the world’s two largest economies could impact plans for future growth. “It makes us have to rethink all of our investments as we move forward. Because we’re not sure what’s going to happen.”
McKenzie Stratigopoulos is a producer at Yahoo Finance. Follow her on Twitter: @McKenzieBeehler