Business
Tariffs hit boots, bags and more as leather prices jump — and relief could be years away
Different types of leather are seen at the Rio of Mercedes cowboy boot factory, on July 31, 2025, in Mercedes, Texas.
Ronaldo Schemidt | 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 because 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. Executives told investors in August that tariff-related expenses could total $160 million, warning of “greater than previously expected profit headwinds” moving forward.
Chasing low costs
A pair of Twisted X boots starts the way most U.S. leather goods do: as a raw, salted cow hide from an American ranch. That hide is shipped overseas, usually to Asia, to be tanned into leather. For Twisted X, roughly half of its products are tanned in China, down from 90% in 2017, Reddy said.
Once turned into leather, the material typically is shipped to another factory — often in China, Vietnam, Mexico or India — to be cut, stitched and assembled, before finally returning to the U.S. as a finished product.
Under normal conditions, that global supply chain kept costs low. But reliance on foreign production backfired when the new duties took effect, Reddy said.
“When tariffs happened, everything stopped,” said Kerry Brozyna, president of the Leather and Hide Council of America. “So they [China] couldn’t take shipments in because if they took them in and they computed in the price of the tariff, they wouldn’t be able to sell them.”
Currently, the U.S. leather trade deficit is one of the widest in manufacturing. In 2023, the U.S. imported $1.37 billion in leather apparel while exporting just $92.7 million, a roughly 15-to-1 deficit, according to the Census Bureau. China alone supplies about one-third of all leather goods imported into the U.S.
“Being so reliant on many overseas productions methods ended up hurting many people in the industry in the beginning when they didn’t know exactly what was going to happen,” Reddy said. “At Twisted X, we have been working for a while to reduce reliance on China.”
As the duties took effect, Twisted X and many other leather companies rushed to exit China and encountered new problems: bottlenecks in Cambodia and Bangladesh, longer lead times in Vietnam, and a sudden 50% tariff on many Indian leather exports imposed in August.
By late summer, nearly every leather company was paying more at every stage — for hides, tanning, assembly and re-importation, according to Reddy.
“We saw all our channels to make boots keep getting more expensive until we were able to figure out a good solution,” Reddy said.
Conglomerates like 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, Ricco said. 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, Ricco said. Analysts expect prices for leather footwear and accessories to rise roughly 22% over the next year or two and around 7% long term as higher tariffs, freight costs and scarce premium hides move through the system.
“2026 is going to probably be where rubber meets the road,” Ricco said. “They [leather companies] have to make these decisions about whether to pass cost increases on to consumers, whether to cut jobs and whether to reduce payments to shareholders.”
Domestic declines
Workers at the Rio of Mercedes cowboy boot factory put the finishing touches on boots on July 31, 2025, in Mercedes, Texas.
Ronaldo Schemidt | AFP | Getty Images
The decline of a once-booming domestic leather manufacturing industry is also reducing the options companies have to pivot away from the global supply chain.
In the 1950s, manufacturers employed more than 300,000 people in roughly 1,000 tanneries nationwide, mainly spread across the Midwest and Northeast, according to the Leather and Hide Council of America.
The workforce has fallen to around 50,000 in 2025, with the number of tanneries dwindling to a few hundred, per the council.
Reddy said the so-called golden age of domestic manufacturing is long gone.
The burden of tariffs has had the steepest impact on brands that rely on finished goods from Asia — not companies sourcing leather domestically. So far, rather than restoring U.S. manufacturing, as the Trump administration had predicated the tariffs on, many brands have responded by reshuffling suppliers overseas to contain costs, according to industry experts.
Women work in a leather factory in Kolkata, India, on November 25, 2025.
Nurphoto | Nurphoto | Getty Images
Cattle shortages
U.S. leather companies are also dealing with a raw material shortage, as there are simply fewer cattle hides to work with.
The U.S. cattle herd is at its smallest point since the 1950s following prolonged drought, rising feed costs and herd liquidation. Since hides are a mandatory byproduct of dairy and beef production, fewer cattle mean fewer hides — even as global demand for top-grade leather persists for handbags, upholstery and footwear.
“Few cattle means that what hides are left makes it more expensive to produce boots with high-quality leather that we use,” Reddy said.
For shoppers hoping for a discount by trading down for a synthetic, alternatives haven’t been spared either.
Many faux-leather and polyurethane materials rely on petrochemical inputs sourced from Asia, which also fall under the new tariff schedules. Retailers and industry analysts said synthetic footwear and handbags are seeing mid- to high-single-digit cost increases, according to industry estimates.
Motorists are facing higher fuel prices ahead of Easter break due to the conflict in the Middle East, the RAC says.
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Business
E-cheques coming soon? RBI unveils Payments Vision 2028, plans wider oversight of digital players – The Times of India
The Reserve Bank of India (RBI) on Friday unveiled its ‘Payments Vision 2028’ document, outlining a roadmap that includes exploring electronic cheques, expanding regulatory oversight to digital platforms, and strengthening safeguards in the fast-growing payments ecosystem, PTI reported.The central bank said it will examine the introduction of e-cheques to combine the advantages of paper instruments with the speed and reliability of digital payments. “To leverage the unique benefits of paper-based instruments and the speed and reliability of electronic payments, and cater to new business use cases, the introduction of electronic cheques in India shall be explored,” the RBI said.Alongside, the RBI is considering widening the regulatory ambit to include entities such as e-commerce marketplaces and centralised platforms that play a growing role in facilitating digital transactions.“In addition, e-commerce marketplaces and centralized platforms have been assuming significant responsibilities that could have implications on the orderly functioning of the payments ecosystem. These aspects shall be examined in detail and, if required, the scope of direct regulations shall be extended to cover such entities,” the document said.The vision document also proposes allowing users to enable or disable transactions across digital payment modes, similar to controls available for card transactions.To address fraud risks, the RBI is exploring a “shared responsibility framework” under which both the issuing bank and the beneficiary bank would share liability in cases of unauthorised digital transactions.The central bank also plans to review cheque design and security features, introduce a Domestic Legal Entity Identifier (DLEI) framework for better transaction traceability, and bring in a Cyber Key Risk Indicators (KRI) framework for non-bank payment system operators.Other initiatives include exploring white-label solutions in the Aadhaar Enabled Payment System (AePS), developing interoperability in the Trade Receivables e-Discounting System (TReDS), and introducing a ‘Payments Switching Service’ to ease customer migration across platforms.The RBI said it will also review the cross-border payments ecosystem to improve efficiency and streamline authorisation processes, alongside publishing periodic reports on global and domestic payment trends.Additionally, the central bank aims to enhance access to payment data and reimagine the card payments ecosystem by promoting secure tokenisation, improved transparency in pricing, and greater choice for users and merchants.
Blue chips in London outperformed European and US peers on Friday, but closed marginally lower, as oil prices rose once more amid few signs of progress in ending the Iran war.
“The simple fact is that sentiment is likely to stay negative for as long as the Strait of Hormuz remains unsafe for shipping and controlled by Iran,” commented David Morrison, senior market analyst at Trade Nation.
The FTSE 100 closed down just 4.82 points at 9,967.35. The FTSE 250 ended down 331.32 points, 1.6%, at 20,964.75, and the AIM All-Share closed down 13.43 points, 1.9%, at 705.63.
For the week, the FTSE 100 rose 0.5%, the FTSE 250 fell 1.8% and the AIM All-Share Index fell 1.7%.
On Thursday, US President Donald Trump issued a 10-day extension on his deadline for Tehran to open the Strait of Hormuz or face the destruction of its energy assets.
But with Iran maintaining a hold on the Straits, Mr Trump’s announcement largely failed to lift the mood for markets.
“Traders are now discounting the daily torrent of posts and incoherent press conferences from the White House, as the war rages on,” said Kathleen Brooks, research director at XTB.
“Investors are facing the facts: the Strait of Hormuz is effectively closed and it does not appear that there is a real end in sight to the war.”
Mr Trump has insisted Iran wanted “to make a deal” to end the war engulfing the region, but the Iranian side has indicated no let-up in reprisal attacks against Israel and targets across the Gulf.
Kuwait said on Friday its main commercial port was damaged in a drone attack.
Iran’s Tasnim news agency said the country has responded to Washington’s 15-point plan to end the war and was awaiting a reply.
Reports also suggested the US is weighing up sending up to 10,000 additional troops to the Middle East, fuelling speculation that Washington may be preparing for a potential ground operation in Iran.
The Wall Street Journal reported that the move would provide Mr Trump with “more military options”.
Amid the impasse, the oil price’s upward trajectory resumed.
Brent oil was higher at 111.63 US dollars a barrel on Friday afternoon, from 108.80 dollars late on Thursday.
In European equities on Friday, the CAC 40 in Paris closed down 0.9%, while the DAX 40 in Frankfurt ended 1.4% lower.
“Trump’s 10-day Taco (Trump always chickens out) has had a less profound impact compared with Monday’s five-day reprieve, with equities losing ground in Europe despite the president’s decision to once again postpone strikes on key energy infrastructure. Instead, there is a real concern that we could see escalation through the use of boots on the ground,” said Joshua Mahony at Scope Markets.
Stocks in New York were lower. The Dow Jones Industrial Average was down 1.1%, the S&P 500 index was 1.0% lower, and the Nasdaq Composite fell 1.4%.
The yield on the US 10-year Treasury widened to 4.42% on Friday from 4.40% on Thursday. The yield on the US 30-year Treasury stretched to 4.95% from 4.94%.
The pound fell to 1.3288 US dollars on Friday afternoon from 1.3338 dollars at the equities close on Thursday. Against the euro, sterling fell to 1.1554 euros from 1.1563 euros a day prior.
The euro stood lower against the greenback at 1.1521 dollars from 1.1534 dollars. Against the Japanese yen, the dollar was trading higher at 160.10 yen compared to 159.65 yen.
Supporting the FTSE 100, AstraZeneca rose 3.4% after reporting positive phase three results for its chronic obstructive pulmonary disease treatment, tozorakimab.
The company said the drug delivered “significant and highly clinically meaningful” reductions in exacerbations in two replicate trials, Oberon and Titania.
The Bank of America said the data was a “pleasant surprise” after failed trials at Roche and Sanofi for similar drugs.
Cambridge-based AstraZeneca is the FTSE 100’s most valuable company, worth about £223 billion.
The firm sees peak sales for tozorakimab of 3-5 billion dollars, while the current Visible Alpha consensus is 1.2 billion dollars.
3i rallied by 1.0%, after slumping 18% on Thursday amid disappointing like-for-like growth at its main investment, Dutch discount retailer Action.
JPMorgan said lower guidance for flat margins and lower like-for-like sales at Action “than we were expecting, was disappointing.”
Nonetheless, JPM said Action remains a “leading compound growth story” and “3i now offers a cheap way in”.
Elsewhere, the rising gold price boosted Fresnillo and Endeavour Mining, up 0.6% and 1.9% respectively.
Gold rose to 4,517.90 dollars an ounce on Friday from 4,383.70 dollars at the same time on Thursday.
NatWest rose 0.9% as Deutsche Bank raised its share price target to 840p from 730p.
“NatWest has unfairly derated in our view,” analyst Robert Noble said.
In the debit column, Metlen Energy was the biggest faller, down 8.6%.
The Athens-based energy and metallurgy company said auditors PricewaterhouseCoopers have requested more time to complete work on its 2025 financial statements, its first as a dual-listed company in London and Athens.
The group now expects to release results on April 9, a nine-day delay, and reiterated guidance for earnings before interest, tax, depreciation and amortisation of around £750 million.
Housebuilders were once more under pressure. The Bank of America cut price targets by 20% across the sector and lowered pre-tax profit forecasts by 7% through 2026 to 2028, with sector earnings per share expectations now 6% below consensus.
Barratt Redrow fell 4.7%, Persimmon 3.9% and Taylor Wimpey 1.7%.
The biggest risers on the FTSE 100 were: AstraZeneca, up 472.0p at 14,302.0p; Endeavour Mining, up 80.0p at 4,262.0p; Rio Tinto, up 115.0p at 6,545.0p; Reckitt Benckiser, up 90.0p at 5,164.0p; and Glencore, up 6.4p at 538.4p.
The biggest fallers on the FTSE 100 were: Metlen Energy & Metals, down 3.0p at 31.75p; Barratt Redrow, down 12.6p at 255.7p; Babcock International, down 57.0p at 1,155.0p; Persimmon, down 43.0p at 1,075.0p; and Autotrader, down 17.5p at 447.3p.
Monday’s global economic calendar has UK mortgage approvals data at 7am BST. German and Italian inflation figures are also due, along with the Dallas Fed manufacturing index in the US.
Monday’s local corporate calendar has full-year results from Artisanal Spirits, Aoti and RTW Biotech.
In Europe, daylight saving time starts on Sunday, and clocks go forward by one hour.
Contributed by Alliance News
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