Expect Active Trump Administration on Tariffs, Trade During 2025
Uncertainty and disruption are the key takeaways from the impact of the 2024 U.S. presidential election with regard to trade policies, with tariffs and de minimis the top issues of concern.
Despite the uncertainties ahead, trade executives were clear about the need to engage the incoming Trump administration to mitigate risks and ensure strategic support for the industry at large.
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Regarding tariff uncertainties, Matt Priest, president and CEO of the Footwear Distributors & Retailers of America, said “The sky’s the limit.” He was on a panel discussion on “Unpacking The Election” at the SJ Fall Summit. The panel included Kim Glas, president and CEO of the National Council of Textile Organizations, and was moderated by SJ senior news and features editor Kate Nishimura.
Priest said the numbers bandied about during the campaign have ranged from 60 percent to as high as 200 percent. “First and foremost, we’ve noticed in September of this year import numbers [up] about 13 percent year-over-year. So there’s been a lot of conversation about our industries or companies front loading to get ahead of the curve,” Priest said, adding that the “vast majority of our vendors” are thinking about doing it. Another big question for the footwear industry centers on how to price out product that’s going to come in next year when there’s uncertainty over what the tariff rates will be.
Glas spoke about how the domestic textiles industry is hurting, noting that “We are the canary in the coal mine for how other industries are feeling.” She noted that over the last 18 months, 22 plants that survived the Great Depression, Great Recession and the COVID pandemic shuttered because they could not survive the “onslaught of subsidized, cheap imports coming into the United States.”
She referenced Robert Lighthizer as the USTR during Trump’s first administration, who was very aggressive on trade issues, as well as Trump’s promise to hold China accountable. And while tariffs and making countries accountable for certain practices would help the domestic textiles industry, who will be the next trade czar is key, adding that an across the board tariff would create uncertainty for the sector. Glas was quick to note that brands and retailers looking to diversify and source from the Western hemisphere should consider sourcing more from the U.S. and the “50 other resources from our trade agreement countries and preference countries.”
Glas added that the NCTO will be active with the incoming Trump administration so that they fully understand how the production chain is tied to U.S. jobs across many states. Priest said that while there’s not a whole lot of footwear production in the U.S., his group—which thinks tariffs are terrible—also wants to work with the incoming administration to be more collaborative. “And if the President-elect really wants to tamp down on inflation, we have a few ideas about how we can do that,” he said.
De minimis reform is expected to be another buzz phrase for the incoming administration, in light of bipartisan support in Washington for eliminating the treatment for textile and apparel goods. Under the de minimis trade provision, foreign parcels worth $800 or less can enter the U.S. duty free. And any reform action would help bar Chinese firms, such as Shein and Temu, from abusing U.S. trade laws, as well as help American companies that have lost business due to competition created by cheaply-made imports.
“We have 1.4 billion, minimum, shipments that came in last year, which are duty free boxes that are coming to our doors, largely unexpected duty free, and hurting our intellectual property,” Glas said, adding that half of those boxes are estimated to be textile and apparel products—many of which are counterfeits and dangerous—from Chinese companies and others who are taking advantage of this loophole.”
She said the de minimis loophole needs to be closed immediately, and “if the Trump administration moves forward with additional tariffs without closing the de minimis loophole, you’re going to see an avalanche of boxes like you’ve never seen before and it’s going to put a lot of brands and retailers out of business.”
Glas said there are discussions in Washington about trying to close the loophole during the lame duck session right before new members of Congress are installed. “We did see that the Republicans moved forward with the Bill that anything with the 301 tariffs would no longer be eligible for de minimis. That seems like a no-brainer,” she said, adding that there’s been more bipartisan support in recent weeks on globally banning all textile and apparel goods from de minimus treatment because “we’re the most impacted industry, and so we are pushing hard for the most aggressive, comprehensive solution.”
Priest said his group is less concerned about de minimis as only 14 percent of its membership are impacted, and that tariffs are the bigger headache given the elevated tariff burden, about $4 billion a year, for the footwear sector. He also noted that 2025 will be a critical year for the Trump administration’s agenda, which Priest said is expected to execute on an “impressive” plan of initiatives during the first 100 days. That’s due in part to the super tight majority in the House of Representatives for Republicans. The party has a sweep for 2025—presidency and both chambers of Congress—but may not be so lucky moving closer to the midterm elections, and “once the counter flips to ’26, all bets are off,” Priest said.
Glas agreed: “They are going to come out for that first year and try to accomplish as much as humanly possible…given the dynamics with Congress and having a Republican majority; and you have a seasoned President now coming back into office, understanding some of the mistakes the administration made in the past to try to executive on all fronts.”
She said China is probably the first point of attack for getting aggressive on tariffs, while the idea of tariffs across the board could be more about posturing in terms of negotiation around reciprocity.
“I would absolutely be prepared to start looking at other sources for products to continue diversifying, which many of you have done over the last few years to mitigate risk,” Glas advised attendees.