Footwear

In 2014, U.S. total exports of footwear grew by $58 million (4 percent) (table FW.1). Leading export destinations included Vietnam (primarily footwear parts), to which exports grew by $26 million (44 percent), and Canada, to which they grew by $12 million (9 percent). Imports supplied slightly over 98 percent of demand in the U.S. footwear market and rose by $1.2 billion (5 percent) to $26.0 billion in 2014.¹ Although China remained by far the largest supplier of footwear to the United States, accounting for 66 percent of all U.S. footwear imports in 2014, its share was down from 69 percent in 2013. The respective shares of lower-cost suppliers, such as Vietnam and Indonesia, grew at China’s expense.² Also, U.S. imports from Italy, which supplies higher-priced footwear, grew by 8 percent in 2014.

U.S. consumer spending on footwear rose by almost 2 percent between 2013 and 2014.³ Spending on footwear in the work/occupational/safety and outdoor categories (for which “multifunction footwear” has become the buzzword of outdoor enthusiasts⁴) grew significantly in 2014.⁵ According to observers, the growth in these categories reflects expanding interest in exercise and health and working consumers’ preference for footwear that is practical, comfortable, and necessary for their jobs.⁶

U.S. Exports⁷

Canada, Vietnam, and South Korea⁸ were the top three export markets for U.S. producers, accounting for 17 percent, 10.4 percent, and 9 percent, respectively, of U.S. domestic exports of footwear by value in 2014. Factors contributing to the strong markets in these countries included the types of shoes involved, their quality, and the strength of the dollar. U.S. domestic exports of footwear to Vietnam rose by the largest percentage (44 percent) and amount, up by $26.0 million to $86.0 million. However, virtually all of the U.S. footwear exported to Vietnam consisted of footwear parts used to assemble footwear for the U.S. market.⁹ U.S. domestic exports of footwear to Canada grew by $12 million (9 percent) to $138 million, whereas U.S. exports to South Korea fell for a second consecutive year, down by $11.4 million (14 percent) to $72.2 million.¹⁰

Exports accounted for a growing source of revenue for domestic footwear manufacturers, totaling an estimated 28 percent of industry revenues in 2014, up from 25 percent in 2009.¹¹ American-made shoes, which supplied 1.5 percent of the U.S. footwear market in 2014, are concentrated in niches—rubber/fabric footwear, men’s work shoes, and plastic/protective footwear. (Most U.S.-made protective footwear features safety steel toes.)¹² These products have a reputation for high quality, high value, and durability.¹³ These factors likely contributed to the recent growth of U.S. domestic exports, as did the depreciation of the U.S. dollar against the currencies of major export markets such as Canada and South Korea during 2010–14.¹⁴

Like U.S. domestic exports, total U.S. exports (consisting of domestic exports and re-exports) increased in 2014, rising by 4 percent to $1.4 billion. In recent years, a steady increase in re-exports has been driving much of the growth in total U.S. exports of footwear. Footwear re-exports are primarily sent to neighboring markets. In 2014, re-exports totaled $626 million and accounted for 43 percent of total U.S. exports of footwear, up from $377 million (34 percent) of total U.S. exports of footwear in 2010, respectively, as shown in the following tabulation (millions of dollars):¹⁵

Canada and Mexico were the largest re-export markets for footwear, accounting for 57 percent and 11 percent, respectively, of U.S. footwear re-exports in 2014.¹⁶

The growth in U.S. re-exports of footwear can be attributed to the significant advantages firms gain by using U.S. foreign-trade zones. These include the cost savings of importing products into the United States free of duty; avoiding the financial burden and paperwork associated with duty drawback;¹⁷ the operational efficiencies resulting from streamlining distribution and inventory management within the zones; and the ability to more easily meet U.S. Customs requirements.¹⁸

U.S. Imports

The current revival of the U.S. economy likely contributed to the continued growth of U.S. imports of footwear.¹⁹ In 2014, these imports rose by $1.2 billion (5 percent) to $26.0 billion.²⁰ Most of this growth was accounted for by low-cost imports from Vietnam (up $694 million) and Indonesia (up $78 million). Vietnam’s footwear industry has benefited from a recent investment in upgraded technology and modernization of its production chain.²¹ In addition, anticipation of the Trans-Pacific Partnership agreement and expected trade preferences for footwear and apparel from Vietnam may have encouraged the growth of U.S. footwear imports from Vietnam in 2014.²²

U.S. imports of footwear from Italy, the third-largest supplier of footwear to the United States in 2014, increased $108 million in 2014. Italy is an important supplier to the high-end U.S. market, as Italian footwear producers specialize in making fashionable, high-value, and top-quality shoes (especially women’s luxury footwear).²³

China remained by far the largest supplier of footwear to the United States, accounting for 66 percent of U.S. imports in 2014. While this figure was down from 69 percent in 2013, U.S. imports of footwear from China still rose, albeit by less than 1 percent, to $17.1 billion. The slowdown in the growth of U.S. imports from China in recent years reflects U.S. footwear firms relocating production from China to Vietnam, Indonesia, and other lower-cost Asian suppliers.²⁴

China’s footwear industry has been facing rising costs and other challenges—the quadrupling of factory worker wages since 2005, the appreciation of China’s yuan against the U.S. dollar, newly required compliance with environmental laws, and recent labor shortages. Nevertheless, as one industry source notes, China’s dominance in footwear manufacturing is not likely to erode soon: its massive, well-developed footwear production infrastructure remains unequaled.²⁵

For more than a decade U.S. firms have been outsourcing production of footwear, which is highly labor intensive, to low-cost countries, while retaining design, branding, and distribution in the United States.²⁶ In 2014, U.S. imports of footwear grew by 5 percent. Also, an industry source notes that as U.S. producers have relied increasingly on foreign sources for footwear, the U.S. industry has continued to shrink, and some firms have scaled back their operations.²⁷ Between 2009 and 2014, the number of domestic footwear manufacturing establishments fell from 302 to 277 and the workforce decreased from 13,953 to 13,009.²⁸