Inside the leather trade war hitting handbags, boots and couches
Different types of leather are seen at the Rio of Mercedes cowboy boot factory in Mercedes, Texas, on July 31, 2025.
Ronaldo Schemidt | AFP | Getty Images
Bootmaker Twisted X, known for its Western-style shoes, was thrown into chaos overnight when President Donald Trump imposed sweeping tariffs on imports in April.
The company turned a conference room at its headquarters in Decatur, Texas, into a “tariff war room” as import costs for finished work boots rose, shipments were paused in transit, and bills fluctuated so wildly that staff found themselves recalculating margins hourly.
“Many other leather companies had to pause shipments due to the chaos, and it felt like before you knew it, prices were flying all over the place,” Twisted X CEO Prasad Reddy told CNBC. “It was a very uncertain time.”
Twisted X wasn’t alone. Leather retailers large and small are facing similar challenges, resulting in higher prices at the till that are unlikely to drop any time soon.
As pre-tariff stocks are depleted, the cost of replenishment orders is much higher. Industry experts said the products now hitting the shelves are made from more expensive leather, undergo more expensive foreign processing and are shipped with higher shipping costs than last year’s products.
Yale Budget Lab Leather goods prices are projected to remain elevated by approximately 22% for at least the next one to two years due to inflation, supply chain bottlenecks and exposure to heavy tariffs, especially in China, Vietnam, Italy and India.
“There are two reasons why skin gets hit so hard,” said John Ricco of the budget lab. “No. 1, some of the highest tariff rates are imposed on different countries from which we import most leather. The second reason is that we import much more leather and more broadly apparel-related products from these trading partners than we produce.”
Costs have already been revealed for brands like TapestryHe owns bag manufacturers Coach and Kate Spade. Executives told investors in August that tariff-related expenses could total $160 million, warning of “higher headwinds than previously expected.”
In pursuit of low costs
A pair of Twisted X boots starts out the way most U.S. leather products do: like a raw, salted cowhide. American farm. This leather is shipped overseas, usually to Asia, to be tanned and turned into leather. Roughly half of Twisted X’s products are tanned in China, down from 90% in 2017, Reddy said.
Once the material is made into leather, it is usually shipped to another factory in China, Vietnam, Mexico, or India to be cut, sewn, and assembled, and then shipped back to the U.S. as a finished product.
Under normal circumstances, this global supply chain would keep costs low. But Reddy said dependence on foreign production backfired when new taxes came into force.
“When the tariffs went into effect, everything stopped,” said Kerry Brozyna, president of the Leather and Hide Council of America. “So they [China] “They couldn’t take the shipments because if they had taken them and calculated the tariff price, they wouldn’t have been able to sell them.”
Currently USA leather trade deficit It is one of the widest in production. While the United States imported $1.37 billion in leather clothing in 2023, it exported only $92.7 million; That translates to a roughly 15-to-1 deficit. Census Bureau. China alone supplies nearly one-third of all leather products imported to the United States
“Being so dependent on a lot of overseas production methods hurt a lot of people in the industry at a time when they didn’t quite know what was going to happen to begin with,” Reddy said. “As Twisted X, we have been working for some time to reduce dependence on China.”
When the tariffs took effect, Twisted
According to Reddy, by the end of the summer almost every leather company was paying more at every stage; for leather, tanning, assembly and re-importation.
“We looked at all our channels to keep bots from getting more expensive until we found a good solution,” Reddy said.
holdings such as Steve Madden We also feel the effects.
“The third quarter was challenging, driven largely by the impact of new tariffs on goods imported into the United States,” said Edward Rosenfeld, chairman and CEO of Steve Madden. earnings call In November.
price increases
Many companies are doing what they can, but that buffer is weakening, Ricco said. Despite rerouting supply chains and shifting production, Twisted X said it still had to increase prices by around 1% to 3% this year.
“We consider this a success,” Tricia Mahoney, Twisted X’s chief marketing officer, told CNBC. “Many competitors were expecting bigger increases, but we made sure we put our customers first and kept prices as steady as possible. Next year may be tough, but we’re better prepared than ever.”
Already luxury leather prices have increased. Chanel’s iconic Classic Flap bag is nearly 5% more expensive than last year, following another price increase this spring, according to luxury retail price data.
But by 2026, the price shock in the leather industry will likely be more pronounced, Ricco said. Analysts expect prices for leather shoes and accessories to rise roughly 22% over the next year or two, and about 7% over the long term, due to higher tariffs, freight costs and rare premium leathers moving through the system.
“2026 will probably be where the rubber meets the road,” Ricco said. “Them [leather companies] “We have to make those decisions about whether to pass on cost increases to consumers, whether to lay off jobs, and whether to reduce payouts to shareholders.”
Domestic declines
Workers at the Mercedes cowboy boot factory in Rio put the finishing touches on the boots on July 31, 2025 in Mercedes, Texas.
Ronaldo Schemidt | AFP | Getty Images
The decline of the once booming domestic leather manufacturing industry is also reducing the options companies have to move away from the global supply chain.
By the 1950s, manufacturers employed more than 300,000 people in approximately 1,000 tanneries nationwide; these were mostly spread across the Midwest and Northeast. Leather and Hide Council of America.
The workforce has fallen to around 50,000 by 2025, according to the council, while the number of tanneries has fallen to a few hundred.
Reddy said the so-called golden age of domestic production is long gone.
The tariff burden had the biggest impact on brands that rely on finished products from Asia, not companies that source leather domestically. So far, many brands have responded by redeploying suppliers abroad to contain costs, rather than restoring U.S. production as the Trump administration has relied on tariffs, industry experts say.
Women work in a leather factory in Kolkata, India, on November 25, 2025.
Nurfoto | Nurfoto | Getty Images
cattle famine
US leather companies are also facing shortages of raw materials because there are fewer of them. hides cattle to work.
The U.S. cattle herd has reached its smallest point since the 1950s following prolonged drought, rising feed costs and herd elimination. Less cattle means less hides, as hides are an essential by-product of dairy and beef production; even as global demand for premium leather for handbags, upholstery and shoes continues.
“The low number of cattle means the remaining hides make it more expensive to produce boots from the high-quality leather we use,” Reddy said.
Alternatives were not ignored for customers hoping to get a discount by choosing synthetics.
Many faux leather and polyurethane materials rely on petrochemical inputs from Asia and these are also falling under new tariff schedules. Retailers and industry analysts said synthetic shoes and handbags are seeing mid- to high-single-digit cost increases, according to industry estimates.
