Trump Tariffs Are Squeezing Leather Goods, and Prices Aren’t Coming Down Soon
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Different types of leather are seen at the Rio of Mercedes cowboy boot factory, on July 31, 2025, in Mercedes, Texas.
Ronaldo Scheidt | AFP | Getty Images
Bootmaker Twisted X – known for its Western footwear – was thrown into chaos overnight when President Donald Trump imposed sweeping tariffs on imports in April.
The company turned a conference room at its Decatur, Texas, headquarters into a “tariff war room” as import costs on its finished work boots surged, shipments were paused mid-transit and invoices fluctuated so wildly that staff found themselves recalculating margins by the hour.
“A lot of other leather companies had to pause shipments as of the chaos and it felt like prices were going all over the place before you could take account,” Twisted X CEO Prasad Reddy told CNBC. “It was a very uncertain time.”
Twisted X wasn’t alone. Leather retailers big and small are facing similar challenges, and the result has been higher prices at the register that are unlikely to come down anytime soon.
Pre-tariff inventory is gone, while replacement orders cost far more. The products hitting shelves now were manufactured with more expensive hides, subjected to pricier foreign processing and shipped with higher freight costs than last year’s merchandise, industry experts said.
The Yale Budget Lab projects that leather goods prices will remain elevated by nearly 22% for at least the next one to two years, driven by inflation, supply chain bottlenecks and heavy tariff exposure, particularly across China, Vietnam, Italy and India.
“The reason why leather is hit so hard is twofold,” said John Ricco with the budget lab. “No. 1,some of these tariff rates that are the highest are placed on different countries where we import most leather. The second reason is that we just import a lot of leather, and, more broadly, apparel-related products from these trading partners than we make.”
the costs have already shown up for brands like Tapestry owner of handbag makers Coach and Kate Spade. During an earnings call in late September, tapestry executives said tariffs had contributed to a 3% decline in gross margin for the fiscal first quarter.
Tariffs and Supply Chain Issues Drive Up Shoe Prices
Shoe prices are climbing, and consumers are starting to feel the pinch. New tariffs and ongoing supply chain disruptions are forcing brands to increase costs, impacting everything from athletic sneakers to luxury leather goods.
The Impact of Tariffs
The footwear industry has been particularly vulnerable to tariffs imposed on goods imported into the United States. These tariffs add a direct cost to manufacturers,who often pass those expenses onto consumers. steve Madden are also feeling the impacts.
“The third quarter was challenging, driven largely by the impact of new tariffs on goods imported into the United States,” edward Rosenfeld, chairman and CEO of Steve Madden, said on an earnings call in november.
Price Increases
Many companies absorbed what they could, but that buffer is fading. Despite rerouting supply chains and moving production, Twisted X said it still had to raise prices around 1% to 3% this year.
“We look at it as a success,” twisted X’s chief marketing officer, Tricia Mahoney, told CNBC. “Many competitors were looking at bigger increases and but we made sure to prioritize our customers and keep the prices as stable as possible. Next year could be tough but we are more prepared than ever.”
Already, leather luxury prices are up. Chanel’s iconic Classic Flap bag is about 5% more expensive than it was last year, after yet another round of price hikes this spring, according to luxury retail pricing data.
But, by 2026, the leather industry’s price shock will likely be more prominent. Analysts expect prices for leather footwear and accessories to rise roughly 22% over the next year.