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Matt Priest (FDRA) on Trump administration’s tariff policy: all of this has created a lot of uncertainty in our market

Mar 11, 2025 United States

We bring you an interview with Matt Priest, CEO & President of the Footwear Distributors and Retailers of America (FDRA). The impact of the tariffs imposed on Mexico, Canada and China on US retailers, consumers and the country's economy dominated the conversation

After a one-month delay, the Trump administration’s 25% tariffs on Mexico and Canada went into effect last Tuesday. Tariffs on all Chinese imports were also doubled from 10% to 20%. We spoke to Matt Priest, CEO & President of the Footwear Distributors and Retailers of America (FDRA), to get a sense of how the US footwear industry as a whole has been reacting to this volatile environment and what expectations there are for the near term.

Higher Consumer Prices

According to Matt Priest, there’s no doubt that higher tariffs will translate directly into higher consumer prices, especially for footwear. However, the current administration “does not seem to be interested in trying to get inflation under control, even though they committed to do so”.

In fact, core inflation, which excludes volatile food and energy prices, rose to 3.3% in January from 3.2% in December. “We would argue that the president was elected on a mandate around American consumers’ concerns about inflation, and he is doing the exact opposite of what we would do to bring inflation down”.

Consumer Sentiment

“Consumers are well in tune with what’s happening and concerned about the tariff threat”, emphasised the CEO and President of FDRA.

The latest consumer sentiment survey from the University of Michigan shows that consumer sentiment fell by nearly 10% from January to February, the second consecutive month of decline. “A dramatic month-over-month decrease attached to concerns about inflation and tariffs”, he said, adding that the association’s own figures show that bricks-and-mortar sales are down by 16% since inauguration day.

US consumers “are actually well-educated on this front, which is why we are seeing this weakening of consumer sentiment here in our country very quickly. It's like somebody flipped a switch and consumers are now very concerned”.

Consumer-driven economy

“If the administration aims to turn us into a non-consumer-driven economy, they are going to create a lot of pain to get us there”, he concluded. The US has produced footwear in the past, but it has been a long time.

And that will not change, according to Matt. “We’re not optimistic that additional tariffs will help support additional domestic production”.

“If we look at a country like China, when I started in this job in 2009, the Asian country supplied almost 90% of our footwear sold in the US. That number is now 56%. So even China is moving away from footwear production and going to Vietnam, Bangladesh, Cambodia and Indonesia”.

The US footwear industry “will never be an industry that can supply the more than 2 billion pairs of shoes we bring into this country every year”.

Retaliations

From a broader perspective, “I’m worried about retaliation against the American economy on our agricultural exports, automobiles”, among others. “You wouldn’t know it from the political rhetoric in our country, but we make more in the US now than we ever have in our history. We’re just doing it with fewer people and fewer workers, and we’re doing it more efficiently, and it’s a higher-value product”.

Since the FDRA does not believe that the success or failure of a trade relationship is determined by the trade deficit, the announcement of reciprocal tariffs – not only regarding China and Mexico, but also Vietnam – creates considerable uncertainty.

Uncertainty

“How do we cost the goods? Are retailers going to take higher prices? Will consumers accept higher prices? And if not, wholesalers will have to trim costs to cover those additional costs. That is not an environment you want to be in, where you see job losses or reductions in capital investment”, sums up Matt Priest.

Nevertheless, “what I’m encouraged by, even in the uncertainty of our times, is the fact that our companies are agile, creative, industrious and innovative”. “I think that despite all the headwinds we know we have in front of us, we can face them together. So, I think it’s going to bring us closer together and strengthen us for the days and months ahead”, he said hopefully.

Image Credits: today.uconn.edu

United States Confidence Economy FDRA Footwear Prices Retail Tariffs