Brooks Sports will move the bulk of its manufacturing operations from China to Vietnam as the trade talks between Washington and Beijing drag on with no certain conclusion, CEO Jim Weber said Friday.
Buffett-owned Footwear Maker Moves Output from China to Vietnam
Jim Weber, CEO of Brooks Running, said May 2 that the shoe company is in the process of moving some of its production out of China. © Reuters

The shoes and sports apparel company, known as Brooks Running, is a unit of Warren Buffett's Berkshire Hathaway.

"We believe the trade discussions are muddying the water," a Brooks Running spokesperson said. "We needed to begin making plans in order to future-proof our business."

Brooks Running was especially concerned about tariffs on shoes, following President Donald Trump's remarks last year that he would slap an additional 25% tariff on Chinese goods on top of the 20% tariff that has existed for years.

For a $130 pair of running shoes, a 45% tariff would be "significantly detrimental" to Brooks, according to the spokesperson. The company made a joint decision with its vendor partners in China at the beginning of this year to move some production out of the country.

China accounts for one-third of Brooks' factories worldwide, while 19% of the company's production is done in Vietnam, Brooks data on contract manufacturers from last year shows. It is unclear exactly how much production Brooks will move to Vietnam.

The U.S. and China are still in trade negotiations, though U.S. Treasury Secretary Steven Mnuchin this week said the conversations were "productive." Beijing and Washington had cited progress on issues, including ways to help end tariffs that have burdened the economies of both countries, disrupted supply chains and financial markets.

Trade talks will continue in Washington next week.

Theo Nikkei