In 2025, leather prices have risen due to tariffs and supply chain disruptions, impacting the costs of boots, handbags, and furniture, with some retail prices approaching double-digit increases. Companies such as Twisted X, Tapestry (owner of Coach), and Steve Madden are experiencing sustained margin pressure from higher tariffs, increased freight costs, and a scarcity of hides. Analysts predict that leather goods prices could increase by approximately 22% over the next two years as these factors continue to affect supply chains.

The bootmaker Twisted X faced significant challenges following the imposition of tariffs by the U.S. government in April 2025. The company had to adapt quickly, creating a 'tariff war room' to manage fluctuating import costs and disrupted shipments. CEO Prasad Reddy noted the uncertainty during this period, which was shared by many in the leather industry. As pre-tariff inventory depletes, the replacement products are manufactured with more expensive hides and higher processing and shipping costs.

The Yale Budget Lab has indicated that leather goods prices will remain elevated due to inflation, supply chain bottlenecks, and heavy tariff exposure, particularly from countries like China, Vietnam, Italy, and India. The U.S. leather trade deficit is significant, with imports of leather apparel totaling $1.37 billion in 2023, while exports were only $92.7 million.

The reliance on overseas production has been detrimental, as companies like Twisted X have sought to reduce their dependence on China, which previously accounted for a significant portion of their leather tanning. However, the transition has led to new challenges, including bottlenecks in other countries and increased tariffs on Indian leather exports.

As companies attempt to manage rising costs, many have absorbed some expenses, but this buffer is diminishing. Twisted X has raised prices by 1% to 3% in response to these pressures. Luxury brands, such as Chanel, have also increased prices, reflecting the broader trend in the industry.

The domestic leather manufacturing sector has seen a decline, with employment dropping from over 300,000 in the 1950s to around 50,000 in 2025. The number of tanneries has also decreased significantly, limiting options for companies to pivot away from global supply chains. The anticipated restoration of U.S. manufacturing, as suggested by the previous administration, has not materialized, with many brands instead reshuffling suppliers overseas.

Additionally, U.S. leather companies are facing a shortage of raw materials due to a reduced cattle herd, the smallest since the 1950s, driven by drought and rising feed costs. This reduction in cattle translates to fewer hides available for production, further complicating the industry's ability to meet demand for high-quality leather products. Synthetic alternatives are also experiencing cost increases due to their reliance on petrochemical inputs, which are similarly affected by tariffs.