April 2025 was a cruel month of tariffs, counter-measures, trade tensions and uncertainty. It may mean the end for the model for making and shipping goods that has been in place for decades. This article, the first of two on this subject, considers what this means for hides and leather. The second article examines the implications for finished products that use leather.

Trade was already hard enough in the post-pandemic and geopolitically tense environment of the mid-2020s. The trade disputes that began with tariffs that the US government put in place in early April and the counter-measures that its trading partners have scrambled to offer in reply, leading to a pause of 90 days in most cases, have only made matters worse.

President Donald Trump trailed new tariffs for most of the first quarter of 2025 before imposing a wide range of measures on an equally wide range of countries and industries on April 2. In the immediate build-up, he repeatedly referred to April 2 as Liberation Day because he was certain that payment of all the new tariffs would bring “large amounts of money” into US coffers to fund promised tax cuts and to redress the country’s trade deficits with major economies around the world. 

He claimed Liberation Day would go down in history as the day on which industry in the US would be reborn. He said: “We will supercharge our domestic industrial base. We will pry open foreign markets and break down foreign trade barriers. More production at home will mean stronger competition and lower prices for consumers. For decades, our country has been looted by nations near and far. Foreign leaders have stolen our jobs. Foreign cheaters have ransacked our factories, and scavengers have torn apart our once-beautiful American dream.”

Part of the dream

Cattle, and by extension hides and leather, have been part of the American dream for the best part of two centuries. US-based meat companies generate around 600,000 cattle hides per week. Tanneries in key leather manufacturing countries in Asia and elsewhere turn those US hides into large volumes of finished leather. Finished product companies, many with their headquarters in the US, put that finished leather into shoes, car interiors, furniture and accessories for customers in all parts of the world.

Frequently, under the business model that has evolved, finished product brands work with partners in China, Vietnam, Indonesia, India, Bangladesh, Pakistan, Mexico, Italy, Portugal, Spain, France and many other countries to carry out the manufacture of their products. This global trading system has been in place for 80 years and has generated growth in global gross domestic product from $3 trillion in 1970, according to figures from the World Bank, to more than $100 trillion now. It may now be in danger of crumbling before our eyes.

Hide renewability

Few industries are as truly global, and, therefore, as firmly in the thrall of the global trading system, as leather. With shipments of raw material and finished leather already in need of a major boost, the extra headwinds and the concomitant increase in tensions, uncertainty and caution that Liberation Day is causing will be of no help to the industry.

Sometimes sellers can afford to be patient and wait for difficult market situations to settle down. In theory, this could apply to tanners now. If they have the cash-flow and the physical space to invest in raw material and store semi-processed hides, they could keep part of the supply chain flowing. We saw a lot of that during the covid-19 years and, in many instances, inventory proved discouragingly slow to shift, making this an unappealing prospect now. Part of the rationale for many is that when the longed-for lift in demand for leather comes, there will still be plenty of hides available.

This brings us to the second reason why new disruptions could be bad news for the industry. Hides are such a renewable resource that new stocks continue to become available no matter how much the demand for leather falters and no matter how much panic presidential executive orders spread. People’s need to eat is unchanging and the desire of billions to eat meat remains strong. Therefore, to satisfy that demand, farmers continue to raise cattle, and meat companies continue to buy the livestock and send it to slaughter, removing the hides at the abattoir. This is what makes leather so strongly in tune with the circular economy.

What happens when the hides leave the abattoir matters immensely because, as we reported in World Leather October-November 2024, a failure to turn them into leather will have a startling environmental impact. One tonne of discarded hides will create 12.5 tonnes of CO2-equivalent in direct emissions, without taking into account emissions from the production of the non-leather materials that finished product manufacturers might choose to use instead. The Leather and Hide Council of America did the work to calculate these figures. It told us at the time that current estimated volumes of hides going to waste globally are already likely to be causing direct emissions of 40 million tonnes of CO2-equivalent per year.

Missed opportunities to create value from any hide rub economic salt on the environmental pain. When World Leather analysed figures from France a few years ago, we found that the French leather industry’s investment in raw materials in 2019 was about €665 million. The leather and leather products this material produced ended up creating value of €14.4 billion. The industry was able to increase the raw material’s value by almost 2200%. It is, therefore, difficult to see who can gain if trade tumult causes more hides to go unused and the existing waste to increase.

Ups and downs

On Liberation Day, measures the president announced included a baseline tariff of 10% on almost all imports into the US from almost all countries around the world. For some products, the rates are higher: a 25% tariff on all imported cars stubbornly stayed in place during early April’s roller-coaster ride of baffling daily changes to the figures. Similarly, there is a 25% tariff on imports of steel and aluminium.

For some trading partners, including many that are key players in the global hide and leather industry, the rates are higher still. Imports from China were, initially, to be subject to an additional blanket tariff of 34%, on top of the 20% levy already in place, taking the total to 54%. In the wake of Liberation Day, China imposed additional 34% tariffs of its own on imports from the US. President Trump’s response was to increase, on April 8, total tariffs on imports from China to 104%. China then increased its counter-measures against US imports to 84% in total, at which point President Trump announced a rate of 125% for China, then 145%, with China retaliating with a 125% rate of its own. A full-scale trade war between the world’s two biggest economies had begun to rage.

As per the Liberation Day announcement, imports from Cambodia will be 49%, while Vietnam will incur tariffs of 46%. Elsewhere in Asia, the figures for Bangladesh, Thailand, Taiwan, Indonesia, Pakistan, India, South Korea and Japan are, respectively: 37%, 36%, 32%, 32%, 29%, 26%, 25% and 24%. The European Union faces blanket tariff rates of 20% on most of its exports to the US (cars, as mentioned, are an important exception). The rate is higher for Switzerland at 31%.
After a week, on April 9, President Trump announced a 90-day pause on most of these higher tariffs to allow trading partners to negotiate new deals with the US. While these negotiations take place, most imports from most countries will be subject to the baseline tariff rate of 10%. China misses out and keeps its 125%.  The president said China also wants to “do a deal” with the US, but “just doesn’t quite know how to go about it”. 

Probable hide price hikes

These measures still spell trouble for US hide exports, especially those that, for years, have been going to China. This, and all the confusion, will push prices up and heated debates over which party picks up the extra cost are unlikely to lift the mood much. US hides remain in demand, although volumes have gone down in the last few years as the national cattle herd goes through a period of adjustment. These exports have brought in less money because of the lower volume and because hide prices have been very cheap for a considerable time, but they are still worth more than $1 billion per year to the US.

Between January and October 2024, China imported nearly 12.4 million wet-salted hides from the US, two-thirds of the country’s total exports of this raw material. For exports from the US of wet blue, the four biggest buyers were Vietnam, China, the European Union, followed by Thailand. Together, tanners in these markets snapped up just over 3 million US wet blue hides during the ten-month period, almost 90% of the total.

The average price for wet-salted across the ten-month period was $29.28. The average price for US wet blue was $99.05. If, for argument’s sake, these prices stay the same, China’s 125% tariff on imports from the US would push wet- salted prices to $65.88 each. And, with the tariff included, wet blue hides shipped from the US to China would cost $222.86 each. These are significant price hikes and it seems clear that it will probably be easier for China to find new sources of raw material than it will be for the US to find new buyers for its hides. In the end, the hides have to go to where the tanning drums turn.

Emissions risk

The fact remains that, throughout all of this, the material will continue to be available. If there are 600,000 US hides available per week, we can divide them 50-50 between steers and heifers or cows. We know female cattle slaughter levels have had a higher share for a few years as the national herd contracts, but for simplicity’s sake, we can call it even.

We can also say, from figures that the US Department of Agriculture publishes, that the average weight of steer hides coming to market at the moment is around 28.5 kilos, while the figure for cow and heifer hides is 23.2. The midpoint is, therefore, a weight of around 25 kilos. Total US hide volumes for one week weigh 15,000 tonnes. If, heaven forfend, the hides should go to waste, Liberation Day would lead to direct emissions from unused cattle hides of almost 190,000 tonnes of CO2-equivalent per week.

Commodity considerations

“That would be unthinkable, but it is not going to happen,” observes the vice-president of operations at Bank Bros & Son, Dr Barry Bank. “The hides will still move, even with China adding its counter-veiling tariffs to the cost of importing them. The hides will sell, but the price the US receives will come down to compensate for the tariffs. Hides are a commodity and, for commodities, price is always the remedy.”

Implications of Liberation Day for Canada have generated abundant commentary there. The leather and hide trade have barely merited a mention, which is no surprise to Dr Bank. His family’s Toronto-based company is one of the last remaining players in the Canadian industry. Its involvement in tanning is now exclusively on the US side of the border; Pennsylvania-based Wickett & Craig is part of the group. But it still sources and exports Canadian hides.

Officials at Agriculture and Agri-Food Canada have told World Leather that, in 2024, Canada shipped a total of 3.1 million cattle hides and calfskins to 17 markets overseas, earning export revenues of 140 million Canadian dollars. Tanners in China were the biggest buyers, and only 2.9% of the total volume went to the US. This is a small number of hides to redirect, should the trade tensions make that necessary. This is because too few tanners remain on US soil to make it an important market for Canadian hides.

“What happened to tanners here in Canada has largely happened in the US too,” Dr Bank says. “The shoe leather tanneries are long gone and in the last few decades, the automotive tanners have all decamped to Mexico. Some vegetable-tanned production remains, but we only have three remaining customers of any magnitude in the US, including our own Wickett & Craig tannery, and the volumes are still small. That’s why shipments of hides from Canada to the US are tiny, and those hides that we do ship to the US at the moment will sell elsewhere, immediately.”

He insists that Canadian cattle hides are of high quality and are in demand in China, Japan, Mexico and other markets. “They will always sell,” he says. “It is just a matter of price and, to be frank, the US is not even the highest payer for our products. We will not be penalised by these tariffs.”

Beef grief

Australia, Argentina and the UK are among the trading partners who emerged from Liberation Day with their exports to the US mostly incurring only the baseline tariff of 10%. Some business leaders and politicians in these countries hoped they would get off even more lightly. Leather and hides do not feature in the explanations President Trump and The White House offered for imposing 10% tariffs on these allies and friends, but beef does. A fact-sheet that the White House shared with reporters at the time of the April 2 announcement made specific reference to beef and to trading partners’ positions on beef that the US regards as unfair.

It said that the UK maintains “non-science-based standards that severely restrict US exports of safe, high-quality beef”. The same fact-sheet said Argentina has banned imports of US live cattle since 2002 owing to “unsubstantiated concerns regarding bovine spongiform encephalopathy”. It added that the US now has a $223 million trade deficit with Argentina in beef and beef products.

Still specific to beef, President Trump said on making the April 2 announcement that this was one of the reasons for including Australia among the countries facing new tariffs. He said: “Australians are wonderful people, but they ban American beef. They won’t take any of our beef, yet we imported $3 billion of Australian beef last year alone.”

Calm among the neighbours

For Canada, as we have seen, and also for Mexico, the situation is complex, which is ironic because these two neighbouring countries have had free-trade agreements with the US since 1994. A number of products will still enjoy free-trade status when moving from one North American country to another, but many will not. Exports to the US of commodities relating to energy will face tariffs of 10%. Many other exports will incur tariffs of 25%.

Donald Trump appears not to be the most enthusiastic supporter of the first North American Free Trade Agreement (NAFTA), which took effect in 1994. Since then, he has said, more than 90,000 factories in the US have closed and the country has lost five million manufacturing jobs. “That was the worst trade deal ever made,” the president has commented. NAFTA’s successor, USMCA, came into effect in 2020. As things stand, hides from Canada, the US and Mexico seem to be among the products that can continue move under USMCA. 

If this changes, Mexico could still source hides directly from Canada under the agreement. Mexican tanneries only bought 87,000 cattle hides from Canada in the whole of 2024, according to the Agriculture and Agri-Food Canada figures. But the distant days of 2024 were a time when, thanks to USMCA, a huge volume of US hides were crossing the southern border every week to supply leather manufacturers in Guanajuato and other parts of Mexico. Barry Bank estimates that figure to be around 200,000 hides per week, around one-third of the total volume available from US abattoirs. Canada cannot make up for the loss of that volume, but it can contribute more than 87,000. It can even ship the material on US roads and rivers; the hides can travel as bonded freight without any penalty, Dr Bank explains.
On the Mexican side of the border, the discussion quickly took a surprisingly upbeat tone. Because there are such big questions over what new pattern will emerge for trade flows from Asia to the US, many Mexican commentators believe manufacturers there can increase their already large share of the US market.

Mexico’s president, Claudia Sheinbaum, has said she continues to believe in dialogue and that talks with the trade authorities in the US over making their relationship even better are ongoing. She is also in dialogue with important manufacturing companies in Mexico, including those in the hugely important automotive sector. Automotive companies employ close to two million Mexican workers and the industry brought in almost $200 billion in exports in 2024. “They have told me that, for now, they have no intention of making any changes to the way things work here,” she says.

US president, Donald Trump, presented new tariff rates to the world on April 2, which he called Liberation Day.
Credit: The White House

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