Tariffs hit boots, bags and more as leather prices jump — and relief could be years away

Bootmaker Twisted X — known for its Western footwear — was thrown into chaos overnight erstwhile President Donald Trump imposed sweeping tariffs connected imports successful April.

The institution turned a league country astatine its Decatur, Texas, office into a "tariff warfare room" arsenic import costs connected its finished work boots surged, shipments were paused mid-transit and invoices fluctuated truthful wildly that unit recovered themselves recalculating margins by the hour.

"A batch of different leather companies had to intermission shipments due to the fact that of the chaos and it felt similar prices were going each implicit the spot earlier you could instrumentality account," Twisted X CEO Prasad Reddy told CNBC. "It was a precise uncertain time."

Twisted X wasn't alone. Leather retailers large and tiny are facing akin challenges, and the effect has been higher prices astatine the registry that are improbable to travel down anytime soon.

Pre-tariff inventory is gone, portion replacement orders outgo acold more. The products hitting shelves present were manufactured with much costly hides, subjected to pricier overseas processing and shipped with higher freight costs than past year's merchandise, manufacture experts said.

The Yale Budget Lab projects that leather goods prices volition stay elevated by astir 22% for astatine slightest the adjacent 1 to 2 years, driven by inflation, proviso concatenation bottlenecks and dense tariff exposure, peculiarly crossed China, Vietnam, Italy and India.

"The crushed wherefore leather is deed truthful hard is twofold," said John Ricco with the fund lab. "No. 1, immoderate of these tariff rates that are the highest are placed connected antithetic countries wherever we import astir leather. The 2nd crushed is that we conscionable import a batch of leather, and, much broadly, apparel-related products from these trading partners than we make."

The costs person already shown up for brands similar Tapestry, proprietor of handbag makers Coach and Kate Spade. Executives told investors successful August that tariff-related expenses could full $160 million, informing of "greater than antecedently expected nett headwinds" moving forward.

A brace of Twisted X boots starts the mode astir U.S. leather goods do: arsenic a raw, salted cattle fell from an American ranch. That fell is shipped overseas, usually to Asia, to beryllium tanned into leather. For Twisted X, astir fractional of its products are tanned successful China, down from 90% successful 2017, Reddy said.

Once turned into leather, the worldly typically is shipped to different mill — often successful China, Vietnam, Mexico oregon India — to beryllium cut, stitched and assembled, earlier yet returning to the U.S. arsenic a finished product.

Under mean conditions, that planetary proviso concatenation kept costs low. But reliance connected overseas accumulation backfired erstwhile the caller duties took effect, Reddy said.

"When tariffs happened, everything stopped," said Kerry Brozyna, president of the Leather and Hide Council of America. "So they [China] couldn't instrumentality shipments successful due to the fact that if they took them successful and they computed successful the terms of the tariff, they wouldn't beryllium capable to merchantability them."

Currently, the U.S. leather commercialized deficit is 1 of the widest successful manufacturing. In 2023, the U.S. imported $1.37 cardinal successful leather apparel portion exporting conscionable $92.7 million, a astir 15-to-1 deficit, according to the Census Bureau. China unsocial supplies astir one-third of each leather goods imported into the U.S.

"Being truthful reliant connected galore overseas productions methods ended up hurting galore radical successful the manufacture successful the opening erstwhile they didn't cognize precisely what was going to happen," Reddy said. "At Twisted X, we person been moving for a portion to trim reliance connected China."

As the duties took effect, Twisted X and galore different leather companies rushed to exit China and encountered caller problems: bottlenecks successful Cambodia and Bangladesh, longer pb times successful Vietnam, and a abrupt 50% tariff connected galore Indian leather exports imposed successful August.

By precocious summer, astir each leather institution was paying much astatine each signifier — for hides, tanning, assembly and re-importation, according to Reddy.

"We saw each our channels to marque boots support getting much costly until we were capable to fig retired a bully solution," Reddy said.

Conglomerates similar Steve Madden are besides feeling the impacts.

"The 3rd 4th was challenging, driven mostly by the interaction of caller tariffs connected goods imported into the United States," Edward Rosenfeld, president and CEO of Steve Madden, said connected an earnings call successful November.

Many companies absorbed what they could, but that buffer is fading, Ricco said. Despite rerouting proviso chains and moving production, Twisted X said it inactive had to rise prices astir 1% to 3% this year.

"We look astatine it arsenic a success," Twisted X's main selling officer, Tricia Mahoney, told CNBC. "Many competitors were looking astatine bigger increases and but we made definite to prioritize our customers and support the prices arsenic unchangeable arsenic possible. Next twelvemonth could beryllium pugnacious but we are much prepared than ever."

Already, leather luxury prices are up. Chanel's iconic Classic Flap container is astir 5% much costly than it was past year, aft yet different circular of terms hikes this spring, according to luxury retail pricing data.

But, by 2026, the leather industry's terms daze volition apt beryllium much prominent, Ricco said. Analysts expect prices for leather footwear and accessories to emergence astir 22% implicit the adjacent twelvemonth oregon 2 and astir 7% agelong word arsenic higher tariffs, freight costs and scarce premium hides determination done the system.

"2026 is going to astir apt beryllium wherever rubber meets the road," Ricco said. "They [leather companies] person to marque these decisions astir whether to walk outgo increases connected to consumers, whether to chopped jobs and whether to trim payments to shareholders."

The diminution of a once-booming home leather manufacturing manufacture is besides reducing the options companies person to pivot distant from the planetary proviso chain.

In the 1950s, manufacturers employed much than 300,000 radical successful astir 1,000 tanneries nationwide, chiefly dispersed crossed the Midwest and Northeast, according to the Leather and Hide Council of America.

The workforce has fallen to astir 50,000 successful 2025, with the fig of tanneries dwindling to a fewer hundred, per the council.

Reddy said the alleged aureate property of home manufacturing is agelong gone.

The load of tariffs has had the steepest interaction connected brands that trust connected finished goods from Asia — not companies sourcing leather domestically. So far, alternatively than restoring U.S. manufacturing, arsenic the Trump medication had predicated the tariffs on, galore brands person responded by reshuffling suppliers overseas to incorporate costs, according to manufacture experts.

U.S. leather companies are besides dealing with a earthy worldly shortage, arsenic determination are simply less cattle hides to enactment with.

The U.S. cattle herd is astatine its smallest point since the 1950s pursuing prolonged drought, rising provender costs and herd liquidation. Since hides are a mandatory byproduct of dairy and beef production, less cattle mean less hides — adjacent arsenic planetary request for top-grade leather persists for handbags, upholstery and footwear.

"Few cattle means that what hides are near makes it much costly to nutrient boots with high-quality leather that we use," Reddy said.

For shoppers hoping for a discount by trading down for a synthetic, alternatives haven't been spared either.

Many faux-leather and polyurethane materials trust connected petrochemical inputs sourced from Asia, which besides autumn nether the caller tariff schedules. Retailers and manufacture analysts said synthetic footwear and handbags are seeing mid- to high-single-digit outgo increases, according to manufacture estimates.