>>> WE HAVE A 20% TARIFF
ALREADY, ANOTHER 25% WOULD BE A
45% TARIFF ON A $130 RUNNING
SHOE.
IT'S NOT AFFORDABLE.
WE HAD TO MAKE A DECISION IN
JANUARY.
WE ARE DE-EMPHASIZING CHINA.
WE ARE STILL GOING TO HAVE AN R
& D CENTER THERE AND SOME SMALL
PRODUCTION CAPABILITY BUT THE
VOLUME IS GOING TO VIETNAM.
WE WILL ADD A THIRD COUNTRY WE
WILL NAME NEXT YEAR.
LIZ: DID YOU DO THAT MATH?
THE 20% TARIFF ON FOOTWEAR THAT
BROOKS RUNNING CEO JIM WEBER
REFERRED TO DATES BACK TO THOSE
TWO GUYS ON YOUR SCREEN AND
1930.
THOSE TWO ARE TWO LAWMAKERS BY
THE NAME OF REED SMOOT AND
WILLIS HAWLEY.
THOSE TWO TOGETHER RAISED
TARIFFS ON 20 OR WAS IT 30?
30,000 IMPORTED GOODS COMING
INTO THE U.S., AND MANY SAY THAT
EXTENDED AND EXACERBATED THE
GREAT DEPRESSION OF 1929.
THOSE TARIFFS, STILL IN PLACE
FOR THE FOOTWEAR INDUSTRY.
NOW SHOE MAKERS, FOOTWEAR MAKERS
AND SELLERS ARE PUTTING THEIR
FOOT DOWN URGING PRESIDENT TRUMP
TO REMOVE FOOTWEAR PRODUCTS FROM
HIS LATEST TRANCHE OF TARIFFS
WHICH WOULD LEAD TO AN
ADDITIONAL 25% IN DUTIES IN
SHOES AND SUNDRY.
A RETAIL ANALYST JOINS US RIGHT
NOW, A WOMAN WHO LOVES A GREAT
PAIR OF SHOES, NO DOUBT.
>> NO DOUBT.
ESPECIALLY WHEN IT COMES TO
RUNNING SHOES.
LIZ: RUNNING SHOES, BUT YOU SEE
WHAT THEY ARE UP AGAINST.
THEY ALREADY HAD FOR MANY YEARS
20% TARIFFS AND NOW, IF THEY GET
THE 25% SLAPPED ON, 45%?
UNTENABLE.
>> WE ARE TALKING ABOUT A PAIR
OF RUNNING SHOES THAT MAYBE
COSTS $159 WILL ESSENTIALLY GO
UP TO SOMEWHERE AROUND $195,
PUSHING $200.
RIGHT NOW, WITH THESE IMPENDING
TARIFFS, THIS MIGHT COST A
FAMILY OF FOUR ABOUT $500 A
YEAR, IF IT GOES UP IT WOULD GO
INTO THE THOUSANDS.
LIZ: KIDS' FEET GROW VERY
QUICKLY.
SO ONE MINUTE YOU'VE GOT YOUR
KIDS IN A 7, NEXT THING YOU KNOW
IT'S WAIT A MINUTE, 8 1/2.
HERE'S WHAT, JUST SO EVERYBODY
KNOWS, WHAT THE FOOTWEAR GIANTS
HAVE DONE.
THEY PUT THEIR NAMES ON A LETTER
AND THEY HAVE SENT IT TO
PRESIDENT TRUMP.
WE CAN SHOW YOU SOME OF THIS
LETTER.
IT IS VERY STRONGLY WORDED.
THE LETTER TO THE PRESIDENT ON
THE IMPACT OF A TARIFF HIKE ON
FOOTWEAR.
HERE'S WHAT THEY SAY.
THE PROPOSED ADDITIONAL TARIFF
OF 25% ON FOOTWEAR WOULD BE
CATASTROPHIC FOR OUR CONSUMERS,
OUR COMPANIES AND THE AMERICAN
ECONOMY AS A WHOLE.
AND FOLKS, I NEED YOU TO LISTEN
TO THIS PART.
THERE SHOULD BE NO
MISUNDERSTANDING, IT IS U.S.
CONSUMERS WHO PAY FOR TARIFFS ON
PRODUCTS THAT ARE IMPORTED.
IT IS AN UNAVOIDABLE FACT.
>> SO WHAT IS ALSO VERY
INTERESTING ABOUT THIS, I THINK
PEOPLE ARE SAYING IT'S VERY EASY
FOR THESE COMPANIES TO LEAVE
CHINA TO RELOCATE THEIR
MANUFACTURING, THERE ARE
COUNTRIES LIKE VIETNAM CLOSE BY
OR EVEN MANUFACTURING IN AFRICA.
IT'S VERY DIFFICULT TO UP AND
MOVE YOUR MANUFACTURING THAT
QUICKLY.
IN SOME CASES IT'S TAKEN YEARS.
THERE ARE COMPANIES LIKE UNDER
ARMOUR AND NIKE THAT HAVE BEEN
IN THE PROCESS OF TRYING TO MOVE
THAT MANUFACTURING BUT THIS
TAKES A VERY LONG TIME.
SO THIS ISN'T SOMETHING THAT CAN
HAPPEN IMMEDIATELY SO THAT THESE
COMPANIES LIKE THESE FOOTWEAR
MANUFACTURERS CAN AVOID THE
TARIFFS AND OSTENSIBLY PASS THAT
ALONG TO THE CONSUMER.
IT'S GOING TO OVERLAP AND THE
CONSUMER IS GOING TO END UP
PAYING FOR THAT.
LIZ: THE WHO CONSUMER, CHINESE
OR U.S.?
>> THE U.S. CONSUMER.
YES.
THEY ARE CORRECT.
THE CONSUMER PAYS FOR THE
TARIFFS BUT IT COMES IN PRICE
HIKES.
THAT GETS TRANSLATED INTO WHAT
WE END UP PAYING FOR THOSE
SHOES, FOR THOSE ACCESSORIES
THAT ARE GOING TO GET TARIFFED.
LIZ: IT'S AMAZING BECAUSE JIM
WEBER OF BROOKS RUNNING SAW THE
WRITING ON THE WALL AND SAID WE
COULD NOT WAIT AROUND.
WE COULD NOT WAIT AROUND TO SEE
HOW THIS TRADE WAR WOULD PLAY.
THEY HAD TO TAKE A HUGE
INVESTMENT.
THEY ARE LUCKY BERKSHIRE
HATHAWAY IS THEIR PARENT.
THEY HAD THE CASH FLOW AND THEY
HAD TO MOVE.
IT TOOK MONTHS TO VIETNAM.
>> RIGHT.
HE HAD THE ABILITY TO SEE AROUND
CORNERS IN THAT INSTANCE.
WHAT ABOUT THE COMPANIES THAT
ARE JUST, YOU KNOW, MAYBE
STARTING OUT, THERE ARE
COMPANIES THAT ARE SMALLER THAT
HAVE MANUFACTURING IN CHINA,
THAT CAN'T JUST GET UP AND MOVE
THAT QUICKLY.
LIZ: THEY EMPLOY PEOPLE HERE IN
THE U.S.
>> THOUSANDS OF JOBS WE ARE
TALKING ABOUT.
LIZ: OKAY.
ALL RIGHT.
THANK YOU VERY MUCH.
SO THAT WAS YOUR LESSON OF THE
DAY.
SMOOT-HAWLEY.
THOSE TWO GUYS, 30,000 DIFFERENT
PRODUCTS WITH TARIFFS SLAPPED ON