Trump's latest tariffs could make your shoes a lot more expensive

If there's one theme from the first wave of President Trump's tariff warning letters, it's this: You may pay a lot more for your next few pairs of shoes. The big picture: Almost every shoe sold in the U.S. is imported, and the vast majority of those imports come from places like China, Vietnam, Indonesia, Cambodia and Bangladesh.Those countries now face tariffs of anywhere from 20% to 40% — not quite as bad as feared in April, perhaps, but still enough to potentially impact the market. By the numbers: The Yale Budget Lab estimated late Monday that the new tariffs, as imposed, would raise some categories of shoe prices as much as 37% in the short term.Assuming the tariffs stay in effect, over the long run those prices would be 18% higher than they are today.The intrigue: The fashion industry says it was already paying an effective tariff rate more than five times higher than other industries, due to existing levies on things like footwear.It's still not clear — because so little information has been released — how some of these new tariffs will interact with, or potentially replace, those older duties."They've been putting tariffs on every product from just about every country for a couple of months now, so this is sort of a continuation of the news we've been dealing with and working with for a while now," Steve Lamar, CEO of the American Apparel & Footwear Association, tells Axios."It's really hard, for sure, to know what those final details are going to look like."Yes, but: The one thing that is certain, Lamar says, is the impact if these new levies aren't negotiated away."If these high tariff rates are allowed to persist, these runway looks today are going to be replaced with runaway prices tomorrow."Manufacturers vs. retailers vs. consumersZoom in: If that's the case, someone — or everyone — has to pay as these higher costs hit the supply chain.As KPMG noted in a new study out this week, 57% of large companies say their margins are already being compressed by tariffs, and 77% plan to pass along their costs in the next six months. What they're saying: "It's the manufacturers that are going to be impacted more than the retailers," Arun Sundaram, a senior vice president at CFRA Research who covers retailers, told Axios.Large retailers have more tools to mitigate the impact of tariffs, according to Sundaram.Suppliers for retailers, like Nike for Walmart, may be hesitant to raise prices until they see peers do that first.That could lead to profit margins for the suppliers and manufacturers being more heavily hit by tariffs than the retailers themselves.What we're watching: Many of the big-box retailers report earnings in August, right after the tariff deadline passes.These companies probably "won't give investors a lot of clarity," according to Sundaram.This could give them another earnings season pass, where executives can blame guidance, or lack thereof, on uncertainty.The bottom line: Just like the last few months, for most businesses, there's little choice but to stand by, watch the trade war play out, and hope."People are waiting for clarity, and so those decisions that can be delayed are being delayed — delay in hiring, delay in investments, delay in sourcing decisions," the AAFA's Lamar said. "It really still is a chilling environment."

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