Vans is coming off one of their best years ever, but tariffs may force a major faceplant

Shoe companies are waiting with bated breath as Trump threatens to extend tariffs to all $500B worth of Chinese imports.


July 25, 2018

Vans ollied into the ’60s as a shoe manufacturer based in sunny California — where the skate was chill, and the style was even chiller.

Employees at the then-fledgling company made rubber-soled shoes each morning and sold them directly from their factory in Anaheim, and just like that, their classic canvas slip-ons became an instant American staple for laid back streetwear.

But the company filed for bankruptcy in the ’80s, and by the late ’90s, Vans packed up and kick flipped its way into China for cheaper prices on manufacturing — a move that got them back on their feet in a big way.

Now, they’re killing it: According to The Washington Post, Vans’ annual revenue topped $3B last year, up tenfold from a decade earlier, and their sales rocketed up 35% in the most recent quarter.

But new tariffs could mean they beef it again

Earlier this month, the US imposed tariffs on $34B worth of Chinese imports, including cars and industrial machinery.

Now, Trump is talking about upping the ante, telling CNBC last Friday that he wants to extend tariffs to all $500B worth of imports from China (shoes are the 5th-largest category for Chinese imports).

The footwear industry already pays nearly $3B a year in tariffs (canvas shoes come with particularly high tariffs, some as high as 68.5%), which has long led the shoe industry to look for cheaper alternatives in Asia, like Vietnam and Cambodia.

Now, the entire shoe industry is on high alert

And so they should be: 98% of all shoes are manufactured abroad, and nearly 71% come from China (last year, the US imported $14.8B worth of shoes from the country).

“We would be asleep if we weren’t concerned about it,” said Scott A. Roe, the CFO of Vans’ parent company VF Corporation.

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