Tariffs disrupt supply chains across the leather industry
New import tariffs imposed in April have upended the global supply chains of US leather goods makers, driving up costs and creating widespread uncertainty across the industry. Western footwear brand Twisted X said the sudden duties forced it to halt shipments, rework invoices repeatedly, and reassess margins in real time as import costs surged.
The disruption was not limited to a single company. Leather retailers across the market faced similar pressures, with higher costs now flowing through to consumers as pre tariff inventory has been exhausted.
Prices expected to stay elevated for years
Industry analysts estimate that leather goods prices will remain nearly 22% higher for at least the next one to two years. The increase reflects a combination of tariffs, inflation, supply chain bottlenecks, and heavy exposure to imports from China, Vietnam, Italy, and India.
Higher costs are already appearing on store shelves. Replacement inventory is produced using more expensive hides, processed overseas at higher cost, and shipped under increased freight rates compared with last year.
Heavy reliance on overseas production backfires
Most US leather goods begin as domestically sourced cow hides that are shipped abroad for tanning, cutting, stitching, and assembly before returning as finished products. While this model historically kept prices low, it left companies vulnerable once tariffs took effect.
China remains a central supplier, accounting for roughly one third of US leather goods imports. In 2023, the US imported $1.37 billion in leather apparel while exporting just $92.7 million, underscoring a wide trade imbalance.
Supply chain shifts bring new challenges
As tariffs took hold, companies rushed to move production out of China, only to encounter bottlenecks in Cambodia and Bangladesh, longer lead times in Vietnam, and a new 50% tariff on many Indian leather exports introduced in August.
By late summer, companies reported higher costs at every stage of production, from hides and tanning to assembly and re importation.
Brands warn of rising costs and thinner margins
Major brands have begun to quantify the financial impact. Tapestry, owner of Coach and Kate Spade, warned investors that tariff related costs could reach $160 million, citing increased pressure on profits. Steve Madden also described tariffs as a major factor weighing on recent quarterly results.
While some companies absorbed costs initially, that buffer is fading. Twisted X said it raised prices by 1% to 3% this year, smaller than many competitors but still a notable shift.
Domestic manufacturing offers limited relief
The long term decline of US leather manufacturing has reduced options for reshoring production. Employment in domestic tanneries has fallen sharply since the mid twentieth century, leaving only a fraction of the workforce and facilities that once existed.
Rather than restoring US manufacturing, many companies have responded to tariffs by reshuffling overseas suppliers in an effort to contain costs.
Cattle shortages add pressure to raw materials
Compounding the problem, the US cattle herd is at its smallest level since the 1950s following drought, rising feed costs, and herd liquidation. Fewer cattle mean fewer hides, even as global demand for premium leather remains strong.
Synthetic alternatives have not escaped cost pressures either. Many faux leather materials rely on petrochemical inputs sourced from Asia and are also subject to tariffs, pushing prices higher across footwear and accessories.
