Just ahead of the high-takes reciprocal trade talks with the U.S., Vietnam‘s Trade Minister Nguyen Hong Dien said the country is ready to open its market and give more incentives for U.S. exports.
In April, U.S. President Donald Trump disclosed global reciprocal tariffs that raised Vietnam’s new total duty rate to 46 percent. Since then, there has been a temporary 10 percent increase during a 90-day pause for imports from Vietnam until July 9. The U.S. and Vietnam have been in intensive trade talks to strike a new trade agreement that would cap any new duties to a number lower than the planned 46 percent tariff should Trump reinstitute the original reciprocal rate.
The Distributors and Retailers of America, along with more than 80 leading U.S. footwear firms, at the end of April sent a letter to Trump urging him to exempt footwear from the reciprocal tariff plan. Trade talks are set to resume this month.
Vietnam remains a key manufacturing hub for athletic performance footwear. When Vietnam concluded a second round of tariff talks with the U.S. in Washington last month on the Bilateral Agreement on Reciprocal Trade between Vietnam and the U.S., a May 22 statement from Vietnam’s Ministry of Industry and Trade said the talks between the two negotiating delegations — led by Vietnam Minister Nguyen Hong Dien and U.S. Trade Representative Ambassador Jamieson Greer — ”made positive progress.”
In preparation for the next round of talks this month, Dien met with Senator Roger Marshall (R-KS) on Tuesday in Washington, D.C. A statement on Vietnam’s Ministry of Industry and Trade said on Tuesday that the Asian country is “ready to open its market, provide more incentives for U.S. exports” and has requested the U.S. to take “corresponding steps.”
A Bloomberg story said that while Vietnam has taken steps to crackdown on trade fraud, a U.S. concern, one outstanding issue is the Trump administration’s desire to lower Vietnam’s Chinese imports. While Dien’s in town, he’s been meeting with fashion and retail executives from Nike Inc., Walmart Inc. and others as he gets ready for the upcoming talks.
Footwear executives are keeping close tabs on those talks. In last month’s first quarter earnings conference call, Crocs Inc. CEO Andrew Rees said the “daily uncertainty as to the level of these tariffs makes it incredibly hard to plan and predict both short- and long-term impacts to our business.”
He said sourcing for the U.S. market in 2025 includes 47 percent from Vietnam, 17 percent from Indonesia, 13 percent each for China and India, and 5 percent each for Mexico and Cambodia.
During the call, he spoke about the looming uncertainty of Vietnam, noting that the “whole industry is worried about if a reciprocal tariff remains in place [is] Vietnam. That’s a huge amount of production for us and everybody else. That would be incredibly hard to mitigate.”
Adidas CEO Bjørn Gulden said during the company’s April 29 conference call on first-quarter earnings that the expectation is that “people will start to raise prices should these duties or all the duties be confirmed.”
Nike has already implemented some price adjustments, raising retail prices in its U.S. that average between $2 and $10, but it did keep intact the current price range for goods under $100. And the Air Force 1 sneaker, a popular work shoe for service providers that’s priced at $115, will not see any price increase.
Other footwear prices, such as sneakers between $100 and $150, will see increases up to $5, while those starting at $150 and higher, could see increases up to $10. The sports and apparel giant elected not to raise any prices on kids’ products, whether footwear or apparel, and it also has determined that there won’t be any increases for any Jordan product.