Steven Madden’s Strategic Shift Amidst Tariff Concerns

The American footwear brand Steven Madden has announced plans to significantly reduce its manufacturing footprint in China, aiming to cut nearly half of its production there within the next year. This decision comes as the company prepares for potential tariffs under a second term for former President Donald J. Trump, who has consistently promised to impose stricter trade measures on Chinese imports.

Renowned for its trendy footwear that appeals to teenagers across the United States, Steven Madden communicated this strategic shift during a call with Wall Street analysts on Thursday. The company’s chief executive, Edward Rosenfeld, stated, “We have been planning for a potential scenario in which we would have to move goods out of China more quickly.” He emphasized that the company began to implement this plan immediately following the election results.

Throughout his campaign, Trump made various pledges, many of which were viewed skeptically by experts. However, there was a consensus regarding his firm stance on China and the likelihood of increased tariffs. The former president, who triggered a wave of corporate relocations from China after his initial election in 2016, has vowed to implement additional tariffs of up to 60 percent, or even more, on goods imported from China. He has also proposed tariffs of up to 20 percent on all foreign-made products to incentivize domestic manufacturing.

Rosenfeld revealed that Steven Madden has been proactively developing a manufacturing base outside of China for several years, focusing on countries such as Cambodia, Vietnam, Brazil, and Mexico. Despite these efforts, the transition away from China has proven challenging. Currently, over 70 percent of the company’s imports to the U.S. still originate from Chinese suppliers.

According to Rosenfeld, the company anticipates that within a year, around 25 percent of its business could be subject to tariffs on Chinese products. He remarked, “It is hard to move out of China,” highlighting the complexities involved in shifting production. Bert Hofman, a former World Bank country director for China, noted that most suppliers for companies like Steven Madden are still based in China, which makes sourcing much easier. Transitioning to alternative countries for production introduces logistical difficulties, customs challenges, and the need to adapt to new production environments.

Consequently, while higher tariffs may compel companies to relocate their manufacturing, Hofman pointed out that this does not necessarily mean returning to the United States. “Companies will be forced to move,” he explained, “but not back to the U.S.; instead, they will likely shift to countries that maintain strong connections with their existing China-based suppliers.”