Matt Barnes
Appearances
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
It's called the de minimis threshold.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
We really try to be a brand that does not identify as what you would call the traditional grandpa shoes.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
We really try to be a brand that can be attractive to just about anybody and to relieve the pain that a lot of people feel on a daily basis. I wear Crews every day and got them on right now.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
I'm wearing Adam 2 at the moment.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
Yeah, de minimis is a great advantage for us. For example, during 2024, we shipped 100% of our products to customers in the U.S., and we're able to avoid the duties and tariffs through that method.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
During the calendar fiscal year of 2024, we saved over $2 million in tariffs.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
Yeah, for our Chinese product right now, for our sneakers, for example, the Adam 2 that I'm currently wearing, the tariff rate is 172.5% as of today.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
Yeah, for sure. So if you assume an example of a pair of shoes at $175, it would be $302 in tariffs.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
Without the de minimis limits and with the current tariff situation, we have had to raise prices. We have had to start charging for shipping, and it's painful. We've already seen an impact as a result of raising prices, and we just don't have the margin to recover all of the tariff costs.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
You know, the Nikes of the world or the Adidas probably could work something out like that, right? But we just unfortunately don't have that kind of mass market volume.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
For the moment, we've been able to mitigate the financial impacts through much of this year. But if the tariffs remain in place as they are today through, I would say, probably late Q3, early Q4, it's going to become existential. It is very, very troubling. And it's going to get very, very expensive very, very quickly.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
We're trying to look for other places to source. And we do know and expect, as has been indicated by the administration, that the de minimis limits will go away for all countries at some point.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
Well, the ideal state would be no tariffs, right? But of course, you know, we know that there's an intent behind what the Trump administration is trying to do. But right now, we just don't know what's going to happen and when it's going to happen. Businesses need predictable opportunities to make money.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
When the economy or the environment is not predictable, it's really hard for a business like ours to provide a product or service at a reasonable price to the consumer. If we can predict it, we can build it into our cost model. It may be painful, it may not be what we want, but at least it's predictable.
The Journal.
A Tariff Loophole Just Closed. What That Means for Online Shopping.
With the elimination of the de minimis, it's been really, really tough for us to determine what the next step should be.