Matt Priest, president and CEO the Footwear Distributors and Retailers of America (FDRA), talked with SGB Executive on Friday, February 20, following the U.S. Supreme Court’s decision ruling that struck down most of President Trump’s global tariffs under the International Emergency Economic Powers Act (IEEPA), including the likely benefits for the footwear industry, the path to refund payouts and where prices could be heading.
On Saturday, February 21, the President announced a new global tariff rate of 15 percent, up from the 10 percent rate he had threatened on Friday following the Court’s ruling. The tariffs will be constituted under Section 122 of the 1974 Trade Act, under which the applied tariffs can remain in effect for no more than 150 days unless Congress authorizes an extension.
SGB: We have heard many concerns about the potential fallout. What do you see as the positives from the ruling for the U.S. footwear industry?
Matt Priest: It’s really good news. I think it’s a reassertion of the constitutional order, which I think is helpful for business predictability. I think our founders were brilliant at creating a separation of powers, with tariff policy falling to Congress. And Congress, ultimately multiple times, has delegated that authority to the President of the United States under different sections: Section 232, Section 301 and Section 338. Those are some we will become more familiar with in the coming days and weeks. But, that said, they do not give carte blanche authority, no matter who the president is, to impose tariffs as they see fit at every level and under every circumstance.
So, it somewhat tamps down the hysteria driven by the IEEPA uncertainty and, I think, it also narrows whatever happens next. The menu of options narrows. If we went from the Cheesecake Factory menu down to Chipotle, I think we’d have a lot fewer options. They are more predictable, and there is a process we will go through. I think it will give us an opportunity to really engage even more with the administration about [trade policy]. The President himself said publicly he does not want to make shoes in the U.S. anymore. That’s not what this is about. Well, then, how do we craft policy that ensures that our consumers are not hit with such high tariffs? So, we will do that through this entire process for sure.
SGB: So, it provides more operational certainty, even amid all the new uncertainties?
Matt Priest: Another way to ask ourselves that question is: What if they had come out in support of the president’s use of IEEPA? We would feel totally dejected because it’s been such a roller coaster ride with carte blanche authority, and it’s so hard to know which of the President’s actions, reactions, or pronouncements under IEEPA would take effect. Some took effect very quickly. Some were so high that they created a trade embargo very quickly. And you can’t operate a business that way. He knows that. He’s run businesses. He even talked about the need for predictability in his comments today. I think that was key to him, too. My hope is that they keep that in mind, no matter where they go with their next steps.
SGB: What concerns do you have about how this might play out?
Matt Priest: There are two paths in front of us now. One is retroactive, and the other is more prospective. The retroactive is how do we get refunds, and what does that look like legally? And when will that be decided? When will the Federal Circuit and the Appellate Court issue guidance and provide clarity for importers on how to obtain refunds? There are a lot of big “ifs”. We just don’t know. As Justice Kavanaugh pointed out in his dissent and as the President pointed out, the ruling says nothing about the process for refunds — absolutely nothing. We must figure that out.
Do I think there will be opportunities for refunds? Yes. If you’re an importer and you have all your documentation in order, I think there will be a process at some point. Will it be quick? No. Should you totally take it to the bank? No. But we will figure that out as we move through this.
SGB: What are the prospective considerations?
Matt Priest: The other thing that’s more near-term is when did the IEEPA tariffs end technically? We had 325 members on an emergency video call just a few hours after the ruling was announced, and most of our conversation was around, ‘When is this going to be turned off?’ I’ve got goods in the water. I’ve got goods arriving at the port over the next few days. Is there a duty bill that I need to pay over the next few weeks? What does that look like?’ We’re waiting for customs on that, and hopefully, they will provide guidance sooner rather than later that helps answer those questions.
In the mid- to long-term, the President said he would impose an additional 10 percent global tariff under Section 122. So, what does that look like? That’s temporary, but will he continue it in some way? What will he do under 301? So, again, there remains uncertainty, but I think taking the nuclear bomb off the table from a tariff threat perspective will help our members, hopefully, ease into some of this a little more easily.
SGB: Do we have any estimate of the amount of refunds potentially returning to the U.S. footwear industry?
Matt Priest: We usually pay about $3 billion a year in duties as an industry. We paid $6.2 billion in 2025, so they over doubled our duties in one year. Let’s say there’s $3 billion in additional tariffs…I don’t know, and I can’t imagine that will all come back…You might have importers with only a few pairs. They might feel that if they have to hire an attorney, it might just not make sense. But, obviously, the big boys and girls who are importing a lot of product, it’s going to make sense. The other thing is that typically with refunds, the government pays interest out. So, what will that look like?
I think we’ll be in an environment where some subset of that $3 billion will be clawed back at some point, and then it will be very curious to see what duty collection looks like going forward, even with these new tools the President is implementing. I don’t think it will be nearly as dramatic as we’ve seen, but we will have to wait and see.
SGB: That should help sales growth and industry profitability.
Matt Priest: If we go from $6.2 billion down to $3 billion or even with $4 billion, that’s $2 billion that’s going to be moving through our market. That’s substantial. We’ll see how it affects sales growth, but it’s house money since people weren’t expecting it. I think that will be part of the narrative that will have our executives breathe a deep sigh of relief after today’s ruling.
SGB: The FDRA found that footwear inflation in 2025 was flat despite the tariffs but increased in recent months as average landing costs for footwear imports continued to rise. Do you now see prices coming down?
Matt Priest: Yeah, we had a 2 percent jump up in January of this year, the highest uptick since November of 2022. But that’s a great question. I suspect, where it matters most, sort of that mass retail, where there is the highest competition for driving down prices for consumers, I think the consumer will see [lower prices] in due time. But, at the same time, we don’t shy away from the fact that a lot of our companies may have been holding off from hiring people or deploying certain capital investments in technology or facilities that could have been placed on hold because they had a duty payment that they weren’t expecting or hadn’t been budgeting for in the millions of dollars. So, hopefully, this will free up some of that, and we might see an uptick in that activity.
And there has been some dumbing down of product, like taking value out of the shoes so you can lower your FOB (freight on board) price. So, even with a higher tariff, you are paying less. You’re trying to maintain a little more margin by not buying as expensive materials for your product. The ruling might unleash more innovation in certain products that are helpful for consumers.
It could take many forms, and we don’t apologize for it. I mean, I would never go to a private American citizen and say, ‘What are you going to use your tax refund on? You better do it on this, that or the other?’…. The companies will make their determination. Capitalism has a funny way of sorting all that out on behalf of the American consumer.
SGB: One analyst cited the risk that retail could become more promotional due to the ruling. Do you see that?
Matt Priest: We have elevated inventory levels right now because demand has been somewhat muted by higher prices. The price elasticity opportunity for our members has been limited based on these higher tariffs…So maybe this frees up some of that, again, depending on what else happens on the tariff front. Maybe that creates an opportunity for our retailers in particular — not to be overly promotional, but to lower prices on all consumer goods, not just footwear. So that may even free up some opportunities for our members. But, I think, it will be a more advantageous environment.
SGB: You don’t expect broad price drops in footwear?
Matt Priest: In the competitive spaces that are really price sensitive, absolutely. If you walk into a Walmart, Target, or Costco and look around, the majority of their products two years ago had a much lower tariff burden, and now it’s historically high. Now that’s going to return maybe to more normal. That’s got to be a positive for cost and for consumer access to products. It’s hyper competitive there, and I think we’re going to see that play out.
SGB: What’s your advice to members about pursuing refunds or managing with potential counter moves from the Trump administration?
Matt Priest: One of the questions leading up to this announcement was: ‘Should we sue or not?’ We had a lot of conversations about whether companies felt they needed to sue. We were always somewhat neutral on that. We don’t want to advise companies on whether they definitely should sue or not, because there are political considerations involved. There are already lawsuits, and, obviously, the Costco lawsuit, which hit the first week of December, kind of broke the dam, and a lot more flowed in. Well, it’s clear to us now that to get refunds, you don’t have to file a lawsuit. That’s our expectation, at least. So, we are advising our members to make sure all your paperwork is written and organized — to work with your brokers, your internal council, and your external customs council, almost as if you’re about to go through an audit. Just get everything lined up so if, and when, that portal opens, and you can vouch for and seek that refund, you’re ready to go.
But a lot of it is patience. Everyone wants an answer now. When we hosted our emergency call just a few hours ago, people had really good questions, but it’s still in the fog of the trade war, right? We didn’t have all the answers. And, I think, patience is key as we wait for all this to shake out. It’s a great decision today, but there are a number of questions that aren’t answered, and it will take time to get those answers.
Images courtesy U.S. Supreme Court/Matt Priest
