Various kinds of leather-based are seen on the Rio of Mercedes cowboy boot manufacturing facility, on July 31, 2025, in Mercedes, Texas.
Ronaldo Schemidt | AFP | Getty Photos
Bootmaker Twisted X — recognized for its Western footwear — was thrown into chaos in a single day when President Donald Trump imposed sweeping tariffs on imports in April.
The corporate turned a convention room at its Decatur, Texas, headquarters right into a “tariff battle room” as import prices on its completed work boots surged, shipments have been paused mid-transit and invoices fluctuated so wildly that employees discovered themselves recalculating margins by the hour.
“A whole lot of different leather-based firms needed to pause shipments due to the chaos and it felt like costs have been going in all places earlier than you may take account,” Twisted X CEO Prasad Reddy instructed CNBC. “It was a really unsure time.”
Twisted X wasn’t alone. Leather-based retailers large and small are going through comparable challenges, and the consequence has been increased costs on the register which can be unlikely to come back down anytime quickly.
Pre-tariff stock is gone, whereas alternative orders price much more. The merchandise hitting cabinets now have been manufactured with dearer hides, subjected to pricier international processing and shipped with increased freight prices than final yr’s merchandise, trade specialists mentioned.
The Yale Funds Lab tasks that leather-based items costs will stay elevated by almost 22% for a minimum of the following one to 2 years, pushed by inflation, provide chain bottlenecks and heavy tariff publicity, notably throughout China, Vietnam, Italy and India.
“The rationale why leather-based is hit so laborious is twofold,” mentioned John Ricco with the funds lab. “No. 1, a few of these tariff charges which can be the very best are positioned on completely different nations the place we import most leather-based. The second cause is that we simply import plenty of leather-based, and, extra broadly, apparel-related merchandise from these buying and selling companions than we make.”
The prices have already proven up for manufacturers like Tapestry, proprietor of purse makers Coach and Kate Spade. Executives instructed traders in August that tariff-related bills might whole $160 million, warning of “higher than beforehand anticipated revenue headwinds” shifting ahead.
Chasing low prices
A pair of Twisted X boots begins the way in which most U.S. leather-based items do: as a uncooked, salted cow disguise from an American ranch. That disguise is shipped abroad, often to Asia, to be tanned into leather-based. For Twisted X, roughly half of its merchandise are tanned in China, down from 90% in 2017, Reddy mentioned.
As soon as became leather-based, the fabric usually is shipped to a different manufacturing facility — typically in China, Vietnam, Mexico or India — to be reduce, stitched and assembled, earlier than lastly returning to the U.S. as a completed product.
Underneath regular circumstances, that international provide chain stored prices low. However reliance on international manufacturing backfired when the brand new duties took impact, Reddy mentioned.
“When tariffs occurred, all the pieces stopped,” mentioned Kerry Brozyna, president of the Leather-based and Conceal Council of America. “In order that they [China] could not take shipments in as a result of in the event that they took them in they usually computed within the worth of the tariff, they would not be capable of promote them.”
At present, the U.S. leather-based commerce deficit is likely one of the widest in manufacturing. In 2023, the U.S. imported $1.37 billion in leather-based attire whereas exporting simply $92.7 million, a roughly 15-to-1 deficit, in keeping with the Census Bureau. China alone provides about one-third of all leather-based items imported into the U.S.
“Being so reliant on many abroad productions strategies ended up hurting many individuals within the trade at first after they did not know precisely what was going to occur,” Reddy mentioned. “At Twisted X, now we have been working for some time to cut back reliance on China.”
Because the duties took impact, Twisted X and lots of different leather-based firms rushed to exit China and encountered new issues: bottlenecks in Cambodia and Bangladesh, longer lead occasions in Vietnam, and a sudden 50% tariff on many Indian leather-based exports imposed in August.
By late summer time, almost each leather-based firm was paying extra at each stage — for hides, tanning, meeting and re-importation, in keeping with Reddy.
“We noticed all our channels to make boots preserve getting dearer till we have been in a position to determine a superb answer,” Reddy mentioned.
Conglomerates like Steve Madden are additionally feeling the impacts.
“The third quarter was difficult, pushed largely by the impression of recent tariffs on items imported into america,” Edward Rosenfeld, chairman and CEO of Steve Madden, mentioned on an earnings name in November.
Worth will increase
Many firms absorbed what they might, however that buffer is fading, Ricco mentioned. Regardless of rerouting provide chains and shifting manufacturing, Twisted X mentioned it nonetheless needed to elevate costs round 1% to three% this yr.
“We take a look at it as a hit,” Twisted X’s chief advertising officer, Tricia Mahoney, instructed CNBC. “Many rivals have been greater will increase and however we made positive to prioritize our prospects and preserve the costs as secure as attainable. Subsequent yr may very well be robust however we’re extra ready than ever.”
Already, leather-based luxurious costs are up. Chanel’s iconic Basic Flap bag is about 5% dearer than it was final yr, after yet one more spherical of worth hikes this spring, in keeping with luxurious retail pricing knowledge.
However, by 2026, the leather-based trade’s worth shock will probably be extra distinguished, Ricco mentioned. Analysts anticipate costs for leather-based footwear and equipment to rise roughly 22% over the following yr or two and round 7% long run as increased tariffs, freight prices and scarce premium hides transfer via the system.
“2026 goes to most likely be the place rubber meets the street,” Ricco mentioned. “They [leather companies] should make these selections about whether or not to move price will increase on to customers, whether or not to chop jobs and whether or not to cut back funds to shareholders.”
Home declines
Staff on the Rio of Mercedes cowboy boot manufacturing facility put the ending touches on boots on July 31, 2025, in Mercedes, Texas.
Ronaldo Schemidt | AFP | Getty Photos
The decline of a once-booming home leather-based manufacturing trade can also be lowering the choices firms should pivot away from the worldwide provide chain.
Within the Nineteen Fifties, producers employed greater than 300,000 folks in roughly 1,000 tanneries nationwide, primarily unfold throughout the Midwest and Northeast, in keeping with the Leather-based and Conceal Council of America.
The workforce has fallen to round 50,000 in 2025, with the variety of tanneries dwindling to some hundred, per the council.
Reddy mentioned the so-called golden age of home manufacturing is lengthy gone.
The burden of tariffs has had the steepest impression on manufacturers that depend on completed items from Asia — not firms sourcing leather-based domestically. Up to now, slightly than restoring U.S. manufacturing, because the Trump administration had predicated the tariffs on, many manufacturers have responded by reshuffling suppliers abroad to include prices, in keeping with trade specialists.
Girls work in a leather-based manufacturing facility in Kolkata, India, on November 25, 2025.
Nurphoto | Nurphoto | Getty Photos
Cattle shortages
U.S. leather-based firms are additionally coping with a uncooked materials scarcity, as there are merely fewer cattle hides to work with.
The U.S. cattle herd is at its smallest level for the reason that Nineteen Fifties following extended drought, rising feed prices and herd liquidation. Since hides are a compulsory byproduct of dairy and beef manufacturing, fewer cattle imply fewer hides — whilst international demand for top-grade leather-based persists for purses, upholstery and footwear.
“Few cattle implies that what hides are left makes it dearer to supply boots with high-quality leather-based that we use,” Reddy mentioned.
For consumers hoping for a reduction by buying and selling down for an artificial, options have not been spared both.
Many faux-leather and polyurethane supplies depend on petrochemical inputs sourced from Asia, which additionally fall underneath the brand new tariff schedules. Retailers and trade analysts mentioned artificial footwear and purses are seeing mid- to high-single-digit price will increase, in keeping with trade estimates.
