In a significant shift impacting the leather industry, Twisted X, the U.S. bootmaker recognized for its Western footwear, has faced turmoil since President Donald Trump imposed sweeping tariffs on imports in April. The company had to rapidly establish a “tariff war room” at its Decatur, Texas, headquarters in response to the surging import costs of its finished work boots. The aftermath of the tariffs brought chaos to the supply chain, halting shipments mid-transit and causing invoice prices to fluctuate dramatically, requiring staff to constantly recalculate profit margins. CEO Prasad Reddy remarked on the uncertainty that permeated the period, stating, “It was a very uncertain time.”
Twisted X is not an isolated case; leather retailers across the industry are grappling with similar difficulties, leading to higher prices at the cash register that are expected to persist. As pre-tariff inventory is depleted, new replacement orders are coming in at significantly higher prices. According to experts, the new inventory hitting shelves is made from costlier hides, processed internationally at increased prices, and shipped under higher freight costs compared to last year’s products. The Yale Budget Lab estimates that prices for leather goods will remain inflated—by nearly 22%—for the next one to two years as a result of ongoing inflation, persistent supply chain bottlenecks, and substantial tariff exposure from key trading partners, including China, Vietnam, Italy, and India.
John Ricco from the Yale Budget Lab explained, “The reason why leather is hit so hard is twofold. Some of these tariff rates are among the highest, imposed on countries that export the most leather. Secondly, the U.S. imports significantly more leather than it produces.” Brands like Tapestry, which owns major handbag lines such as Coach and Kate Spade, have already reported substantial tariff-related expenses, anticipating costs could reach $160 million, while issuing warnings about greater profit headwinds.
The typical lifecycle of a Twisted X boot begins with raw cow hides sourced from American ranches, which are then shipped overseas for tanning—much of it historically taking place in China. Reddy noted that the proportion of their products tanned in China has decreased to approximately 50% from 90% in 2017. This reliance on overseas processing became problematic as new tariffs disrupted normal operations. Kerry Brozyna, president of the Leather and Hide Council of America, elaborated on the fallout: “When tariffs happened, everything stopped… companies in China could not accept shipments without accounting for the tariffs, which affected their sales.”
The U.S. is currently grappling with a pronounced leather trade deficit. In 2023, it imported $1.37 billion in leather apparel against exports of only $92.7 million, showcasing a roughly 15-to-1 deficit—China is a major contributor, accounting for about one-third of leather goods imported into the U.S. Reddy further stated that the industry’s over-dependence on overseas production has ultimately backfired as companies pivot to navigate these new tariffs.
Many leather companies have attempted to shift their operations away from China, confronting obstacles such as bottlenecks in Cambodia and Bangladesh, lengthened lead times in Vietnam, and a steep 50% tariff on Indian leather exports implemented in August. As a result, companies found themselves incurring increased costs across the board—hides, tanning, and assembly—and facing challenges in re-importing goods at sustainable prices.
Many companies absorbed costs but found their cushions diminishing. Even with rerouted supply chains, Twisted X had to raise prices by about 1% to 3% this year, which Reddy views as a minor success relative to competitors who faced larger increases. “Next year could be tough, but we are more prepared than ever,” Reddy mentioned.
Luxury brands are not exempt from the price hikes either. For instance, the price of Chanel’s iconic Classic Flap bag has risen approximately 5% compared to last year after a sequence of price increases this past spring. Analysts predict that the leather industry’s price challenges will become even more pronounced by 2026, with forecasts estimating a rise of around 22% in leather footwear and accessory prices over the next couple of years.
In addition to the effects of tariffs, the leather industry is also contending with a raw material shortage. The U.S. cattle herd is currently at its lowest level since the 1950s, primarily due to prolonged drought and rising costs of feed. As fewer cattle are processed, the supply of hides has diminished, leading to increased production costs for high-quality leather products.
Moreover, consumers hoping to switch to synthetic alternatives are not finding reprieve, as those materials often depend on petrochemical inputs sourced from Asia, which are also subject to the new tariffs. Consequently, retailers and analysts are reporting that cost increases for synthetic footwear and handbags are falling within the mid- to high-single-digit range.
The ongoing shifts within the leather industry underscore the significant impact of the tariff policies, revealing a complex landscape for manufacturers and consumers alike.
