Why Trump’s Favorite Shoe Company Is Fighting the White House (w/ Thomas Florsheim Jr.)

Summary

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Podcast Summary: Bulwark Takes – "Why Trump’s Favorite Shoe Company Is Fighting the White House"

Host: Kathryn Rampel (The Bulwark)
Guest: Tom Florsheim Jr. (CEO, Waco Group/Florsheim Shoes)
Release Date: May 22, 2026

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Overview

In this episode, Kathryn Rampel speaks with Tom Florsheim Jr., CEO of the Waco Group—parent company of Florsheim Shoes (noted as President Trump’s favorite brand). Their conversation dives deep into the massive upheaval the footwear industry has faced in the wake of the “Liberation Day” tariffs imposed by the Trump administration. Florsheim details how these tariffs—at times exceeding 145%—have upended production planning, driven up costs, threatened jobs and businesses (especially small ones), and forced even traditional brands like his to take legal action against the federal government. The episode is a candid look at the secondary impacts of tariff policies, raising questions about the strategic logic behind blanket import taxes and the real-world consequences for American businesses and consumers.

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Key Discussion Points & Insights

1. History and Structure of Florsheim/Waco Group

• Florsheim Shoes is part of Waco Group, a publicly traded company with four main brands, three in men’s shoes.
  [01:58]
• All of Waco’s production is overseas—in China, Cambodia, Vietnam, the Dominican Republic, and India.
  U.S. manufacturing is now virtually non-existent for shoes:

  “Less than 1% of all shoes that are sold in the U.S. are made in the U.S.”
  —Tom Florsheim Jr. [02:56]

2. Why Shoe Manufacturing Left the U.S.

• Labor costs and lack of a domestic components industry make U.S. manufacturing impractical and uneconomical.

  “The shoe industry is a very labor intensive industry… moved offshore because of the comparative advantage… Today, less than 1% [are U.S.-made].”
  —Tom Florsheim Jr. [03:12]

• If they tried to reshore manufacturing, costs would double or more:

  “The majority of our products sell around $150. If we were to make these same shoes in the U.S., at a very minimum, they would be double that price—probably well over $300.”
  —Tom Florsheim Jr. [04:04]

3. Impact of the “Liberation Day” Tariffs

• Shock and disarray followed the sudden imposition of massive tariffs (up to 145% on shoes from key countries).

  “The first cost of a shoe is $50, you’re going to pay a tariff of something like $75 on a $50 shoe.”
  —Tom Florsheim Jr. [06:03]

• Companies were unable to pass costs immediately due to locked-in purchase orders.
  They had to “eat” the losses:

  “All of a sudden, the cost of our product in some cases is more than doubling and we’re selling shoes and we’re losing money.”
  —Tom Florsheim Jr. [07:02]

• Tariff increases hit multiple countries as policy shifted, creating persistent uncertainty:

  “We moved a lot of product to India. Then there was a fight… and the tariffs went up to 25%, then 50%. So the alternative we picked was not the best idea… It was really, really difficult.”
  —Tom Florsheim Jr. [08:07]

• Florsheim described it as a game of “whack a mole,” shifting production among countries.
  — [09:24]

4. Broader Costs and Business Uncertainty

• Tariffs weren’t just a financial burden—they consumed leadership and staff time at the expense of long-term business strategy.

  “The opportunity cost… All that got put on hold because we were just trying to figure out how we price product, not lose money, and how we’re going to move shoes to all these different countries.”
  —Tom Florsheim Jr. [11:17]

• Waco paid $19.8 million in tariffs, with only limited ability to pass these along (modest 10% price increase).
  — [12:21], [12:33]

• Most increased costs were absorbed by the company, resulting in a significant hit to profits:

  “Our profits were off considerably last year. This is all public information.”
  —Tom Florsheim Jr. [12:55]

• Larger firms could weather the storm, but small businesses faced existential threats:

  “This has put many small businesses in our industry out of business.”
  —Tom Florsheim Jr. [14:03]

5. Consumer Costs and Ripple Effects

• Demand for shoes is ‘pretty elastic’—price increases do reduce sales.

  “We increased our prices in July of last year by 10%. It does impact the volume, and price points are very, very important in our industry.”
  —Tom Florsheim Jr. [16:18]

• Raised prices compound issues for consumers already squeezed by broader inflation.
  — [16:18]

• There are invisible costs: lost sales, wasted resources (time spent shifting logistics and production), and aggregate economic drag.
  — [17:35]

6. Legal Challenge Against the Tariffs

• Waco Group sued the federal government over the application and process of these tariffs.

  “We felt from the beginning this wasn’t the proper use of ipa… But then the situation just kept getting worse… So we decided we’re going to sue the government. We’d had enough.”
  —Tom Florsheim Jr. [19:09]

• Retaliation was a concern in speaking out and litigating, but Florsheim emphasizes the importance of business voices in public debate.
  — [20:56]

• Notable Moment: Florsheim reads from Waco’s legal complaint, highlighting the absurdity of tariffs applying even to places with no civilian population:

  “These tariffs even apply to places with no civilian population or international trade activity… whose only human inhabitants belong to a joint American and British military base… and… islands, which are inhabited only by penguins and seals.”
  —Tom Florsheim Jr. [22:11]

7. The Supreme Court & Refund Saga

• The Supreme Court ruled the tariffs illegal, triggering a refund process—slow and complex:

  “We received the first cash today in our bank account… a small part of it, which was a million and a half dollars. But it’s a good sign.”
  —Tom Florsheim Jr. [23:18]

• Refund process is dragging on, causing further uncertainty for business planning.
  —[24:13], [25:35]

• Administration is seeking new justifications to restore or reimpose tariffs via other mechanisms (e.g., Section 301), meaning uncertainty continues.
  —[25:57], [26:52]

8. On the Logic and Role of Tariffs

• Florsheim isn’t philosophically opposed to tariffs, but argues for targeted, strategic use:

  “Tariffs have a role, but they should be done in a targeted way and in a strategic way. The way this was done was just tariffs on everybody.”
  —Tom Florsheim Jr. [27:51]

• Blanket tariffs lacking strategic logic—especially on items like shoes, which are barely manufactured domestically—are “not fair to American businesses…not fair to consumers.”
  —[31:01]

• Raised costs for necessities like footwear contribute directly to inflation and hit consumers hardest.
  —[28:42]

9. The Past Six Years: Multiple Shocks

• Tariffs were only the latest in a series of shocks:
  • COVID crushed demand as people stopped buying shoes.
  • Supply chain crisis raised shipping costs dramatically.
  • Just as things stabilized, tariffs arrived.
  • > “Business people really yearn for just some, some calmness in the environment. We’ve been sailing through very choppy waters the last six years.”
    —Tom Florsheim Jr. [32:37]

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Notable Quotes & Memorable Moments

• On manufacturing in the U.S.:

  “It’s difficult to even buy a shoebox in the U.S… all of that, including the tanneries, have moved over to the places that are making shoes today.”
  —Tom Florsheim Jr. [04:37]

• On the whack-a-mole dynamic:

  “Whack a mole is a good description of it.”
  —Tom Florsheim Jr. [09:24]

• On leadership distraction:

  “You want the CEOs of company to think long term and strategically… all that got put on hold because we were just trying to figure out how we price product, not lose money.”
  —Tom Florsheim Jr. [11:17]

• On elastic demand:

  “The demand for shoes is pretty elastic. If you raise the prices, the demand goes down.”
  —Tom Florsheim Jr. [16:18]

• On legal action:

  “We wanted to make sure that when refunds happened… that we were protecting our status with this lawsuit.”
  —Tom Florsheim Jr. [19:09]

• On the penguins and seals (legal absurdity):

  “These tariffs even apply to places with no civilian population… inhabited only by penguins and seals.”
  —Tom Florsheim Jr. [22:11]

• On what the shoe industry wants:

  “It doesn't make sense to protect an industry that does not exist.”
  —Tom Florsheim Jr. [30:02]

• On what business needs:

  “I think that it would be good for the economy just to have some certainty and some calm so people can plan and invest that are in business.”
  —Tom Florsheim Jr. [33:42]

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Major Timestamps

• 01:58: Introduction to Waco Group’s history and brands
• 02:25–03:51: Why almost all shoe manufacturing left the U.S.
• 04:04: What U.S. manufacturing would cost
• 06:03–07:42: How tariffs drove up costs overnight and forced losses
• 08:07–09:24: Shifting production across countries and the “whack-a-mole” problem
• 11:17: Tariffs’ opportunity cost—business leadership time
• 12:21–12:55: Direct financial toll: $19.8 million in tariffs, lost profit
• 13:14–14:11: Threat to smaller shoe companies
• 16:18: How even moderate (10%) price increases reduce sales
• 19:09–22:11: Lawsuit against the federal government; reading the legal complaint (penguins and seals)
• 23:18–25:35: First signs of tariff refunds; frustrations with slow, arduous refund process
• 25:57–26:52: Supreme Court ruling and return of some, but not all, tariffs
• 27:11–28:33: Planning amid endless uncertainty
• 32:37: Six years of economic shocks—COVID, supply chains, tariffs

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Conclusion

This episode offers a vivid, on-the-ground account of how policy shifts—especially aggressive or poorly targeted tariffs—cascade through the supply chain, upend business planning, harm consumers, and threaten industries that American policy claims to help. Florsheim’s candor and humor (especially about penguins and seals being tariffed) provide both illumination and levity, while driving home a serious message on the real costs of economic uncertainty and blunt-edged trade war tactics. Businesses, consumers, and policymakers alike have much to learn from the story told here.

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Transcript

[Kathryn Rampel]

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[Kathryn Rampel]

Hi, I'm Kathryn Rampel, economics editor here at the Bulwark. I just finished talking with Tom Florsheim Jr. If that name sounds familiar, it's because Florsheim Shoes is our president's very favorite brand of shoes, and he has been outfitting much of his cabinet in Florsheim Shoes. Tom runs the Waco Company which makes this brand, and we talked a little bit about what life has been like over the past year since Liberation Day tariffs arrived. Spoiler alert. It's been a little rough. At one point, those tariffs got so high that the cost of bringing shoes into the United States more than doubled. Tom and I talked about what it's been like absorbing those costs. Did he ever even consider reshoring some of that manufacturing here to the United States, which he says is economically infeasible, and the other kinds of invisible costs that have come from this tariff policy, not just in dollars paid to the federal government for the tariffs themselves, but lost sales and wasted time having to plan around this unending uncertainty that has come from Trump's tariff agenda. Take a watch. So, Tom, thanks so much for taking the time to talk with me today. Why don't you start by telling people a little bit about your company?

[Tom Florsheim Jr.]

Sure. The company's name is Waco Group and we've been around a long time. We're publicly traded. We have four different brands. Three of them are men's brands, including Florsheim, which is my last name. And we also have an outdoor boot brand called Boggs.

[Kathryn Rampel]

Okay, you said you've been around for a long time. Where are your products made?

[Tom Florsheim Jr.]

Our products are made in China, Cambodia, Vietnam, the Dominican Republic and India.

[Kathryn Rampel]

Not in America?

[Tom Florsheim Jr.]

Not in America. Although we historically were 100% US manufacturing based, the shoe industry moved offshore starting really in the 60s, and that continued. So today less than 1% of all shoes that are sold in the US are made in the US so not

[Kathryn Rampel]

just your company's shoes, but you're saying 1% of all shoes nationwide, from all distributors, all manufacturers, are made actually in the United States?

[Tom Florsheim Jr.]

That's correct. Only 1% or less.

[Kathryn Rampel]

Why is that?

[Tom Florsheim Jr.]

Primarily due to the cost of labor. The shoe industry is a very labor intensive industry. It's fairly low skilled labor. And so work like that in the shoe industry as well as in the apparel industry moved offshore because of the comparative advantage you have in places like India as far as labor rates and having the labor that you need to make these types of products. And so when you, when you think about what the US really prefers to make, it's the higher value added products. And that's the way it's been for quite a while.

[Kathryn Rampel]

If you were to try to manufacture men's shoes in the United States, what kind of price point would we be talking about given those higher labor and any other input costs?

[Tom Florsheim Jr.]

Right. I think the first thing that's important to understand is we for the most part sell moderately priced shoes. So if you look at the 4 Shine brand, our prices range from $90, we go up to $200, but the majority of the products selling around $150. And so if we were to make these same shoes in the US At a very minimum, they would be double that price, probably well over $300.

[Kathryn Rampel]

Have you thought about reshoring ever?

[Tom Florsheim Jr.]

It's really not practical. There's no component industry left in the U.S. it's difficult to even buy a shoebox in the U.S. all of that, including the tanneries, have moved over to the places that are making shoes today.

[Kathryn Rampel]

Okay, and what has the past year been like for your company?

[Tom Florsheim Jr.]

The past year, starting with Liberation Day in April, has been pretty crazy. And we knew from the rhetoric during the campaign that, that there were going to be tariffs. But the day where it was announced what those tariffs would be was, was pretty stunning to us because on the countries that I listed before that make shoes, the tariffs were around 40%. And after that day, the tariffs got worse. So the tariffs, and this is incremental. The shoe industry actually pays pretty high tariffs to begin with. And so the numbers that I'm referring to are incremental on top of the normal tariffs. And so right after Liberty Liberation Day, right after Liberation Day, there was a fight between the US and China, and the incremental tariffs were ramped up to 145%. So what that means is if the first cost of a shoe is $50, you're going to pay a tariff of, of something like $75 on a $50 factory. Cost shoe. And so it just made the possibility of importing from China really non existent. And we had this happen with other countries as well.

[Kathryn Rampel]

But that's in addition to, in addition existing tariffs. So wait, so what, what were the existing tariffs? Just so people can get a sense

[Tom Florsheim Jr.]

of China, out of China. They were already 16%.

[Kathryn Rampel]

Okay, wow. Okay, so you're paying like whatever it was. 161%.

[Tom Florsheim Jr.]

Yeah.

[Kathryn Rampel]

Okay. So with the tariff, it's more than double the original cost of the shoe. What was your response to that new cost pressure? How did you adapt?

[Tom Florsheim Jr.]

You know, I think that we were all in shock because it really makes the situation that we're in as a company very difficult. And part of the reason for that is we work on long timelines. So when the tariffs were announced in April, we had already sold shoes to all of our big customers, which are the department stores and the family shoe stores and the independents for fall. And so the prices that we had sold those shoes for were locked in. We couldn't change that. And so all of a sudden the cost of our product in some cases is more than doubling and we're selling shoes and we're losing money.

[Kathryn Rampel]

And so you're just having to eat the cost.

[Tom Florsheim Jr.]

Exactly. Because we, when we get a purchase order from a customer, that's essentially a contract. And so you can't change the price at that point. And so we ate a lot of the tariff costs and fortunately they didn't stay at 145% for that long. But the amount of the tariffs was onerous. And I'll tell you one other thing. What we did, one of our strategies with how we were planning on handling this was when the tariffs got very high in China, we started moving product to India. And it's no easy feat doing that, but we moved a lot of pride to India. And then there was a fight between our administration and India. And so the tariffs first went up to 25% and then very shortly after that they went up to 50%. So the alternative that we picked was not the best idea. But you had no way to know how this was going to play out. And so it was really, it's very, very difficult for businesses who need to be able to plan, price their product, you know, figure out other investments, and everything kind of came to a halt, which is not good for business, it's not good for the U.S. economy.

[Kathryn Rampel]

It kind of sounds like you were playing whack a mole that you realized it was going to be not financially feasible to continue your production orders in one country, you move to another country where it seems like it might make more economic sense, then there's a spat of some kind that leads to higher tariffs there. So do you move back? What. What did you do at that point?

[Tom Florsheim Jr.]

Whack a mole is a good description of it. And at that point, we just continued to grow our footprint in other countries. We'd been in Vietnam and we'd been in Cambodia, but we increased our footprint because we wanted to have that flexibility. But if you have a program of shoes that you're making in China, to move that program to another country is not something you can just pick up and do you have tooling, you have people that are experienced in making that program. And so this is not something that you can just flip a switch and move up Chinese program to Cambodia. So it just created a very difficult situation for us and for many businesses, particularly small businesses.

[Kathryn Rampel]

And again, to clarify, nowhere under consideration was the idea of moving that production to the United States.

[Tom Florsheim Jr.]

Not at all.

[Kathryn Rampel]

Yeah. Even within these tariffs, that still would not have made financial sense for your business. Correct.

[Tom Florsheim Jr.]

It would not have made sense for us. And talking to other people at the industry, nobody was considering that.

[Kathryn Rampel]

Okay. In addition to the expense of actually moving production from China to India or Cambodia or Vietnam, what kind of tax was all of this on your time? Like, how much time do you think you ended up spending in the past year ordering or reordering, scheduling and rescheduling shipments, working on logistics, making decisions about where to locate production? It seems like the cost of the tariffs is not only the dollars remitted to cbp, it's also the cost on the business's time and resources. Navigating all of this.

[Tom Florsheim Jr.]

Absolutely. And I've thought about that a lot. We're a fairly large company where we have purchasing department with great people and a logistics department with great people. But even with that, it's taken up a tremendous amount of my time. And what I think about is the opportunity cost of that. You know, you want the CEOs of company to think long term and strategically and figure out what they should be investing in. Is that an acquisition, is it an investment in a bigger distribution center? And for us, along with, I would say, most of the companies in our industry, all that got put on hold because we were just trying to figure out how we price product, not lose money, and how we're going to move shoes to all these different countries. And so it was, there's a big opportunity cost, and it was a big. Because of how big a time Sink it was for not just me, but a lot of people at our company.

[Kathryn Rampel]

How much was the cost of the tariffs themselves? How much did you end up remitting?

[Tom Florsheim Jr.]

We ended up remitting $19.8 million to be precise.

[Kathryn Rampel]

Okay, and were you able to pass along any of those costs down the supply chain?

[Tom Florsheim Jr.]

We ate the majority of that, especially in the beginning because we were locked into these pos. And then in July of last year, we raised our prices 10%. But when you're paying tariffs of 50% in India and you know that they kept bouncing around in China, but as high as 145%, that's a small piece. And the majority of it, you know, we just absorbed, which is not an easy thing. And because of that, our profits were off considerably last year. And this is all public information, so anybody can go look to see how much they were off.

[Kathryn Rampel]

Did you have to make any other kinds of cost cutting to compensate?

[Tom Florsheim Jr.]

We, we made the decision that we weren't cutting any people, you know, that we were all going to be in this together. Such an unusual situation. We were hoping that it would not be a situation that lasted for a long time. And so we decided that we have a strong balance sheet, we can get through this. And we were going to all do it at the company together. You know, there were other companies in the industry that had to cut people. This was really difficult for small businesses. We have a credit line, we have cash in the bank. But I've talked to a number of small businesses that they didn't have the cash and so they bought shoes from China. The container came in. They were planning on spending $10,000 on, on tariffs. I'm just making that number up. And they ended up spending $100,000. And so think about that as a small business. And so this has put many small businesses in our industry out of business.

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[Kathryn Rampel]

So you were able to pass on some small fraction of the costs which meant you had to raise prices. Do you think that hurt your sales at all? I mean, one question that I have about how companies had to adapt to these prices is okay, even if they could pass along some of those higher tariff costs in the form of higher prices, doesn't that discourage some of your customers? You're riding down the demand curve and you may end up with fewer customers who are willing to pay at that new higher price point.

[Tom Florsheim Jr.]

So the demand for shoes is pretty elastic. If you raise the prices, the demand goes down. And so that is why we took a conservative approach. And even though the tariffs were much larger, we increased our prices in July of last year by 10%. We get information from most of our major retail customers and so we can see what happens when they raise the prices by 10%. It does impact the volume and price points are very, very important in our industry. And you know, you can't forget about, about the environment that we're in. We're in an environment where we've been through number of years of inflation where the prices a lot of things are up. And so we're dealing with a consumer that does not have a lot of extra money in their pocket. And so we were mindful of that and that's why we took a very conservative approach. We had raised our prices Since I believe 2022 and all of our prices continue to go up every year. And so when we decided to go with a 10% increase that really just barely covered any of the costs that we were incurring, we thought it was better just to from a long term strategy to maintain our market share and eat Most of those costs.

[Kathryn Rampel]

Yeah. So I think this is really important for people to understand. The cost of tariffs is not only the dollars that are flowing to Customs and Border Protection. Right. It's those costs, it's the lost sales. And it's exactly what you were talking about just a moment ago, the wasted resources. Figuring out pricing, figuring out logistics, setting up new factories, deciding how to optimize when the, when the shipments come out and when they should be held. All of those things, some of them are more visible costs to businesses and some of them I think are a little bit less visible, less tangible, but still can really drag on individual companies and the overall economy.

[Tom Florsheim Jr.]

Very, very true. Businesses need to be able to see at least a year into the future. And the way it's been over the last year, these tariffs have literally changed 20 times. And so it's just, you don't know what tomorrow's going to bring. And so planning anything, including how we're going to price product, is just become very, very difficult. I've been in this business a long, long time and I have never seen anything quite like this.

[Kathryn Rampel]

So you ended up suing the federal government over these tariffs. Can you talk a little bit about what went into the decision to challenge these tariffs in litigation?

[Tom Florsheim Jr.]

We felt from the beginning this wasn't the proper use of ipa, which a lot of people agreed with. On the other hand, we didn't want to stand out because people were worried about retaliation if you smoke out, which I did actually quite a bit. But the lawsuit was a step further and we weren't sure whether we wanted to take that step. But then the situation with the tariffs just continued to get worse. And what customs started to do was go through old entries and they came back to us on entries that had clicked on shoes that are shipped in March, before Liberation Day. And then they, they said we owed them another 100%. And so we got a bill from customs a few months ago for 10 entries and that bill was an extra million and a half. And when you get a bill from customs like that, doesn't matter what you think, whether you think it's wrong or right, you've got to send in your checks because if you don't, then you're subject to penalties and interest. And so we did that and at that point we decided we're going to sue the government. It's just, we've had it, we had enough. We're a business, we employ 500 people and we have over 300 good paying jobs in Wisconsin and in the U.S. we have we have over 300 good paying jobs in the U.S. and we just felt that this wasn't a way to treat business. And we wanted to make sure that when refunds happened, we were hoping that they would happen, that we were protecting our status with this lawsuit.

[Kathryn Rampel]

Were you worried at all about retaliation?

[Tom Florsheim Jr.]

Yes. The short answer to your question is yes, of course. You know, when we joined other companies doing this, there were very few. And so today there's over 3,000. But at the time there were very few. And so it wasn't comfortable. And running a public company, you have to think about is this the right thing to do? But I feel that it was important all along to speak out against tariffs because I think that it's important for business people to add their voice to the conversation. And I also think that given the situation with the refunds, it was important to protect ourselves so that if, if the supreme. This was before the Supreme Court ruled against a terrace, but we wanted to protect ourselves if they, if they did rule that way. And as you know, they did rule that way. So we were in good standing.

[Kathryn Rampel]

And as I understand it, the cases, the litigation is still technically open. It's still ongoing. While you're applying for your refunds, can I get you to read from part of your complaint on page six, paragraph six, which I thought was kind of funny.

[Tom Florsheim Jr.]

The Liberation Day order imposed sweeping new tariffs at rates not seen since the Great Depression, including a global 10% tariff on nearly all countries in the world, regardless of whether they impose tariffs on United States products, the rates at which they do so, or the existence of any trade agreements governing the relationship. These tariffs even apply to places with no civilian population or international trade activity, such as the British Indian Ocean Territory, who whose only human inhabitants belong to a joint American and British military base on the island of Diego Garcia and The Heard and McDonald Islands, which are inhabited only by penguins and seals.

[Kathryn Rampel]

So you were in the same boat as the penguins. I don't know if that makes you feel better or not.

[Tom Florsheim Jr.]

Not a lot better.

[Kathryn Rampel]

Okay, so you've applied for your refunds, least for part, Is that right? You've applied for some portion of a tariff refund, but it's not all eligible for application yet, is that right?

[Tom Florsheim Jr.]

Right. On April 20, that was the day that customs had the system set up and we uploaded what they are calling phase one, and that's the majority of the money that we're expecting a refund on. It was about 18.6 million. And I do have some news for you. Oh, we received the first cash today in our bank account. So we received a small part of it, which was a million and a half dollars. But it's a good sign.

[Kathryn Rampel]

Well, don't spend it all in one place, actually. What will you do with that money now that you have it? Are you gonna like, sort of save it and hold on to it in case there are more tariffs that are coming? Are you going to plow it into, I don't know, marketing costs? Are you plugging other holes in your balance sheet? What happens to that cash?

[Tom Florsheim Jr.]

We, we have not thought about that a lot yet because we wanted to first see if we were going to really get this money back. And I'll tell you one other thing about the process. Customs, I feel has done a pretty good job getting this set up because between February 20th and April 20th, so that's two months, they got the system set up and we uploaded 600 plus entries that day in April. But what's happened is 10 days later we had about 10% of those entries come back to us and they were reliquidated or liquidated. And, and since then, you know, so another three weeks has gone by. We've only had ten more entries liquidated. So the process has really slowed down. And that's making us wonder what's, what's going on because they have the system set up, but the process has slowed down drastically. And if you think about it, it could take months and months and months at 10 entries being liquidated every three weeks to finish the first phase of the liquidation, where we have five hundred and thirty entries left to go.

[Kathryn Rampel]

So just so our audience understands what that means, basically you have a lot of steps left. Correct? Is that fair?

[Tom Florsheim Jr.]

That's very correct. And I'm sorry if I got in the weeds there.

[Kathryn Rampel]

No, no, that's okay. You know, not everybody's been through this process, but it sounds like it could be a pain actually, just to step back for a second, what was your reaction when you heard the news about the Supreme Court's decision determining that these IIPA tariffs were unlawful?

[Tom Florsheim Jr.]

I was extremely, extremely happy. You know, it was a very good day. We enjoyed the moment for about 24 hours. And then the administration said that they were putting on 10%, an incremental 10% on everything. And so that was better than where we were, but is still an extra 10%. And if you remember, we raised prices 10%. So it basically the price increase would cover most of these incremental tariffs. However, the administration also said that they were going to start investigations to use this other tariff code 301, and that they were going to get the tariffs back up to the IPA rates by the middle of this year. So we are expecting, and it's. We're expecting this because this is what the administration has said, that in August we're going to be back up to these, these rates that we had last year.

[Kathryn Rampel]

So what does that mean in terms of business planning? Are you racing to get as much product manufactured and shipped over here as possible before we potentially get back up to 145%? Do you hold off on everything? How do you plan around that kind of uncertainty?

[Tom Florsheim Jr.]

It's very difficult to plan. But what we. One thing that we are doing is what you just said. We're trying to get as many shoes in here while the tariff is an incremental 10% while we can. And this has been going on, you know, these tariffs have been up and down, on and off. And so it creates very uneven manufacturing overseas, which anybody can tell you that's in the manufacturing business, that's not good from the standpoint of running a factory. You don't want to, like, turn on high speed and then wait. And that's essentially, that's what happens with this.

[Kathryn Rampel]

Do you think that there is a role for tariffs in US Government policy?

[Tom Florsheim Jr.]

I do. I mean, this isn't. I'm not philosophically against tariffs, so there are definitely unfair business practices out there that are done by other countries. We have industries that, for whatever reason, might need some protection for a period of time. And so I feel that tariffs have a role, but they should be done in a targeted way and in a strategic way. And the way this was done was just tariffs on everybody, you know, and when in Liberation Day, the formula that was used, nobody, nobody could figure out what that formula really meant.

[Kathryn Rampel]

So you don't think shoes are of strategic interest, national security interest to the United States?

[Tom Florsheim Jr.]

I don't, and of course I don't. But the other thing that I think one needs to think about is we are in a situation where the consumer is really suffering in this country. I mean, you read about it every single day, especially now with oil, oil prices being up. And so this ends up adding costs to the shoes for consumers. And so that is causing inflation. It's causing the price of our product to go up. And people in our industry have raised their prices to a varying degree, but I believe almost everybody has increased the prices. And so that hurts our consumers here

[Kathryn Rampel]

in the US and as you said earlier, it means that probably there are going to be fewer Sales. Maybe consumers will absorb those costs and maybe they just won't buy a new pair of shoes this year. Did you have any hesitation in applying for a refund, maybe because of concerns of retaliation or the like?

[Tom Florsheim Jr.]

No, because since we had already filed the lawsuit, we were exposed. And so we did not even think about are we filing for tariff refunds? We knew we were going to. To do that.

[Kathryn Rampel]

If you had the opportunity to talk to the president about his trade policy, what would you say?

[Tom Florsheim Jr.]

I would say that it would be greatly appreciated by the shoe industry if these tariffs were strategic and targeted. There's countries that have trade barriers to the footwear industry or to other American industries, then fine, then there's a place for them. But it needs to be thought out and very targeted because I believe that if it's done that way, the shoe industry will not be tariffed like it's been tariffed over the last year. Because we don't make shoes in this country. It doesn't make sense to protect an industry that does not exist.

[Kathryn Rampel]

Well, the administration, the President might say something like, but we think that they're unfair trade practices for other industries. So why shouldn't we punish China or India or Cambodia or any other country? Because they won't give other kinds of market access to American industry. What would your response be to that?

[Tom Florsheim Jr.]

Yeah, I think it needs to be done on a case by case basis. I mean, all of these countries have different trade policies. Some of them do make it difficult for us to export. And so, you know, if there's a good, logical reason to put tariffs on a country because of unfair trade practices with the United States, go ahead and do it. You know, and if the shoe business has to suffer in a certain country because of that, you know, I get it. What I am against is these tariffs that are done in a kind of broad brush way where it just hit every single country in the world. And, you know, we were talking about countries without people before, and so it really was just a broad brush. And I. And I think that's the. That's the wrong way to do it. It's not fair to American businesses. This was supposed to be a pro business policy, and that. That's gotten lost and it's not fair to consumers. At the end of the day, the consumer is the one who's getting hurt with this.

[Kathryn Rampel]

Yeah, well, we got to stick it to those penguins, you know. So when we spoke before, you talked about how this uncertainty related to tariffs came on the heels of a series of other shocks that have battered Businesses like yours. I'm wondering if you could talk about that. So not, not just what the last year has been like, but let's say the last six or seven years, what has it been like to try to operate a small, medium or large business in this country?

[Tom Florsheim Jr.]

So when you think about the last six years, Covid started off that period where the world basically changed overnight. People weren't buying shoes because they weren't going out of their house. And so that was a very difficult year for us. And then we went from that into a supply chain crisis that was partially caused by the after effects of COVID and that caused Ocean freight to go up 4x, which is a big deal for anybody importing. And so that was very difficult. We got through that sometime toward the end of 22. So we had, we had, you know, a little bit of calm and then went right into the liberation day with these tariffs. And I think that what business people really yearn for is just some, some calmness in the environment. We've, we've been sailing through very choppy waters the last six years, and I think that it would be good for the economy just to have some certainty and some calm so people can plan and invest that are in business.

[Kathryn Rampel]

Yeah, I'm sure to some extent consumers feel the same way.

[Tom Florsheim Jr.]

I'm sure they do.

[Kathryn Rampel]

Yeah. Yeah. And they notice different things, presumably, than a business like yours does. All right, well, Tom, thanks so much for taking the time to talk about what the past one or six years have been like. I wish you calmer seas ahead.

[Tom Florsheim Jr.]

Thank you, Katherine.

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