U.S. Shoe Company Pledges to Keep Prices Steady Amid Tariff Changes

Sharp new U.S. taxes on imported goods are causing jitters among both big corporations and smaller enterprises. Many firms intend to cover the increased expenses themselves. hiking prices For customers. Not the footwear company Keen.

Even though the medium-sized firm, headquartered in Portland, Oregon, functions within an industry heavily impacted by tariffs, Keen assures its clients that it will maintain stable pricing throughout the year regardless of tariff effects on their expenses. This commitment isn’t merely a strategic move aimed at holding onto market position; instead, it reflects long-term efforts by Keen to adapt its operations against unpredictable changes in international trade and geopolitical uncertainties.

"For more than ten years, we've been getting ready for this moment. From the beginning, we recognized the dangers of relying too heavily on a single nation, which led us to decide to expand our supply chains far beyond just China," said Chief Operating Officer Hari Perumal to CBS MoneyWatch.

The firm, which is 22 years old and employs 650 people in the U.S., belongs to the Fuerst Group, known for its work in design and brand management. The business has been striving to lessen its reliance on manufacturing from China as part of efforts to boost its operations within the U.S. and broaden its range of suppliers.

President Trump’s tariffs are disrupting the supply chain strategies of retailers, compelling them to find alternative solutions. This may involve shifting manufacturing operations to a different foreign nation with reduced tariff rates or pouring investments into domestic production facilities. For smaller enterprises, tariff-driven uncertainty can mean shutting operations down altogether When the numbers stop adding up.

The costs of shoes and apparel might skyrocket.

Shoe manufacturers are especially susceptible to disruptions brought about by President Trump's trade conflict due to their heavy dependence on China, which produces 36% of the footwear imported into the U.S., amounting to $9.8 billion, as per an analysis conducted by TD Cowen using global trade statistics.

For that reason, tariffs are expected to hit footwear and apparel companies hard, and that impact will be felt by American consumers as well, according to Jason Judd, a global supply-chain expert and executive director of Cornell University's Global Labor Institute.

According to Judd, in 2023, American families typically allocated around $1,700 annually for shoes and clothes. He anticipates this amount will jump by approximately 70%, reaching roughly $2,800 per household in the near future due to increased tariffs leading to higher prices. Over the next several years, shoppers can expect these costs for footwear and garments to remain elevated as a result of ongoing increases in worldwide duties.

The discomfort will decrease as terms and procurement patterns shift, yet the long-term expenses for each household will remain approximately $425 higher annually.

The abrupt change in tariff policies is already rippling across the industry. German sportswear giant Adidas last month warned U.S. customers that "cost increases due to higher tariffs will eventually cause price increases." And retailers across various industries, from apparel to food, have started passing some of the cost from higher import taxes to consumers in the form of "tariff surcharges."

The warning signs were clear.

Currently, Keen has facilities operating in Shepherdsville, Kentucky; the Dominican Republic; and Thailand, managing about one-third of the company’s worldwide production. Additionally, the firm collaborates with manufacturing partners based in Cambodia, India, and Vietnam—all locations set to be impacted by upcoming new U.S. tariffs. Specifically, Cambodia anticipates a tariff rate of 49%, whereas Vietnam and India will confront duties of 47% and 27%, correspondingly.

"We currently hold a 10% stake in those markets; however, the 10% tariff we’re handling is considerably less compared to what other firms encounter for goods originating from China," Perumal stated to CBS MoneyWatch.

Back in 2015, executives at Keen were already taking note of rising labor costs in China. Today, the company's broad supply chain helps it spread costs across the company, its manufacturing partners and their suppliers, he said.

"We are making a conscious decision not to increase prices, but that's shared by our partners," he said. "They share some of the costs with us, then they go to the company they buy materials from, and those tier-one suppliers share some of the costs as well."