President Donald Trump on Tuesday said he has reached a preliminary trade deal with Indonesia that will set a 19% tariff on the Southeast Asian country’s exports to the US.
This revision in tariff rate came a week after Trump threatened a 32% tariff on Indonesia and he also took to his Truth Social platform to announce that he has dealt directly with Prabowo Subianto, Indonesia’s President.
Apart from Indonesia, the final terms of trade deals with the UK and Vietnam are yet to be negotiated. As far as Vietnam is concerned, Matt Priest, The Footwear Distributors and Retailers of America president and CEO, cited lack of certainty on tariffs as a major cause of concern in the shoe industry. Priest stated that they are uncertain on whether the 20% tariff on sneakers from Vietnam will count or will they be required to pay over and above that.
While uncertainty looms in the footwear industry, the highest tariff threat so far, has been to Brazilian imports. The country, which is the fifth largest footwear producer in the world, has been threatened with a 50% tariff.
With such tariff rates, footwear brands revealed in their Q1 earnings report that they will raise their prices but only upon select items and not on every offering. EY’s Rob Holston, who is the global and Americas consumer products sector leader, said that this will lead to consumers becoming highly selective in their purchasing decisions. Holston also mentioned that tariffs will affect the broader cost landscape.
