The devil is always in the details.
Still, the parameters for the new U.S.-European Union trade deal might just provide the glimmer of hope for firms as they try to figure out how to navigate the new tariff backdrop.
U.S. President Donald Trump and European Commission President Ursula von der Leyen on Sunday disclosed an agreement on a framework for a 15 percent tariff across a wide range of EU imports for the 27-member trade bloc. The trading bloc includes Italy, Spain, Portugal and Germany, all key players in the footwear industry.
Trump first raised the imposition of global reciprocal tariffs on April 2, followed by a subsequent 90-day pause to allow for trade talks. That pause also allowed for a temporary 10 percent tariff rate. But that had many mid-tier and luxury footwear brands that produce in Europe negotiating orders based on a 10 percent duty rate, and they became concerned that higher tariffs could cause those orders to get canceled.
“At this stage, many details of the agreement remain undefined or have yet to be made public. Nevertheless, the reduction of uncertainty in the international context is, in itself, a positive development for companies and for the sector as a whole,” said Paulo Goncalves, director of communications at APICCAPS (Portuguese Footwear, Components, Leather Goods Manufacturers’ Association).
According to Goncalves, the average effective tariff rate was 10 percent in 2024 for Portuguese footwear exported to the U.S. With the planned 15 percent tariff rate, Goncalves said the increase of only 5 percentage points compared to the previous average rate is a “development that can be regarded as positive, especially given the instability and unpredictability of recent months.”
One prevailing issue for all footwear brands globally has been the uncertainty over whether the tariffs are at a flat rate or whether they are stacked onto already high existing rates.
EU President Ursula von der Leyen commented after the agreement was announced that the new 15 percent tariff rate would not be added to any tariffs already in effect, according to a CNBC report. That would be big news to footwear brands if Trump follows the pattern for trade parameters of keeping within similar guidelines for the deals.
“The U.S.-EU trade deal would be great if not stacked, but more details need to follow, especially with steel and aluminum tariffs still in play. Time will tell,” said Rick Helfenbein, an independent consultant and former American Apparel and Footwear Association chairman, president and CEO, said.
According to Helfenbein, the initial thinking was that all tariffs would settle down in the 10 percent range after negotiation. Now, with the costs associated with the taxes under the One Big Beautiful Bill Act, “the baseline seems to have increased to 15 percent as the aspiration level,” Helfenbein said. “That also helps to explain Japan, Philippines, Vietnam and Indonesia.”
Announced trade “deal” parameters include 15 percent for Japan, 19 percent each for Indonesia and Philippines, and 20 percent for Vietnam.
And while footwear prices will rise, Helfenbein said at those levels, the increases “are within the manageable range.”
As has been customary with other trade parameters, specificities of the “trade deal” were not disclosed for what Trump described as “a big deal.” The U.S. and the EU will continue with talks to finalize the wording of specifics of their new agreement. In broad terms, both Trump and von der Leyen said at a press briefing in Scotland that a 15 percent tariff on most European imports to the U.S.
That 15 percent is higher than the 10 percent rate the EU was seeking, but far below the 30 percent duty Trump threatened to impose beginning Aug. 1. Trump noted that he’s charging tariffs at the low end and not the high end because “we don’t want to hurt anybody.”
Both Trump and von de Leyen said there is a 50-50 chance of actually finalizing the terms of a trade deal.
“We’re together the largest economies worldwide,” she said, noting trade volume between the two at $1.7 trillion dollars. The EU president also said the new “deal” is about a rebalance: “We have a surplus. The U.S. has a deficit. We need to rebalance. We will make it more sustainable.”
Near the end of the official press briefing, Trump said the U.S. is “close to a deal with China,” adding that there are “numerous other deals” also in the pipeline.
The deadline for a trade deal “framework” with China is currently Aug. 12 per a 90-day bilateral tariff pause back in May. Representatives from the U.S. and China are in Stockholm to continue trade talks, which began on Monday. A Bloomberg report said one of the agenda items is the possibility of an extension of the trade truce to allow additional time for continued negotiations.
— With contributions from Stephen Garner