Ruthie Davis plucked a shoe from a rack of candy-colored creations, her long lilac nails tracing a heel that was almost the height of her palm. It was the kind of stratospheric heel that has helped Ms. Davis make her name as a shoe designer.
Those heels, in high demand in the United States, are now piling up at her factory in Brazil, where shipments to the United States are paused because of President Trump’s sky-high tariffs.
Brazil seemed like a safe bet for a small business like hers, less expensive than manufacturing in Italy and more suited for a small-scale luxury business than China’s vast sneaker factories. But Mr. Trump’s decision last month to impose a 50 percent tariff on Brazil’s exports — among the highest he has placed on any country this year — has thrown that strategy into disarray. Ms. Davis has put off any more shipments, wary of the enormous tariff bill she would face when the goods crossed the U.S. border.
“The problem is, a 50 percent tariff for these smaller brands, we can’t absorb it, and we don’t have any flexibility to move our production,” she said. “We don’t have this huge budget and all this money sitting around.”
Even though her shoes retail for $500 to $1,000, Ms. Davis said it was hard to turn a profit. Her shoes are typically sold at a discount to that price. She pays a lot for shipping, including airfreighting her shoes in from abroad, as well as for marketing.
“Nobody needs a luxury shoe,” she said. “So I have to market the heck out of a shoe.” If tariffs stay at their current level, she said, she is not sure how long her business can hold on.
“We’re already struggling with that to stay afloat. And then you give us this tariff,” Ms. Davis said. “It’s like, you just want to put a knife in my chest.”
“It will kill an industry,” she predicted.
Ms. Davis is among the many business owners who have chosen to work with factories in countries that are seen as safer alternatives to China, like Brazil and India. That decision has now backfired, with China facing less punishing tariffs than either Brazil or India.
On Wednesday, U.S. tariffs on exports from India doubled, bringing them to a minimum of 50 percent for affected products. That is the same tariff level now applied to most Brazilian goods, with the exception of some products like coal, fertilizer and orange juice. In contrast, most other countries’ exports face additional tariffs of 10 to 30 percent, putting manufacturers in Brazil and India at a disadvantage.
The high rates on India and Brazil, both American allies, came as a particular surprise. The United States runs a trade surplus with Brazil, meaning America sells more to that country than it buys. Mr. Trump’s tariffs have mostly targeted countries with which the U.S. has trade deficits.
For India, the president previously had a warm relationship with Prime Minister Narendra Modi, and many observers initially expected the countries to reach a trade deal. But the two sides failed to come to an agreement, and Mr. Trump ratcheted up tariffs on Indian exports, citing India’s tariffs on American exports and its purchases of Russian oil.
U.S. officials, including in the Trump administration, have been working for years to encourage manufacturers to “derisk” their supply chains by moving some factories out of China and into friendlier countries like Brazil and India. Since 2018, when Mr. Trump targeted China with steep tariffs, U.S. imports from China have fallen, while imports from India and Brazil had risen. Brands like Apple and Steve Madden moved their manufacturing out of China and into India, Brazil and other countries.
But China may no longer be the biggest loser in Mr. Trump’s trade war. The United States has added a 30 percent tariff on Chinese exports in this term. China faces other, pre-existing levies that mean its goods typically face a higher tariff overall, but critics still argue that the discrepancy with Brazil and India makes little sense.
“We should be doing everything we can to get U.S. companies to move out of China, which means that Trump needs a high tariff in China and a low tariff on countries like India,” said Robert D. Atkinson, the president of the Information Technology and Innovation Foundation.
The situation appears to be mainly the result of Mr. Trump’s personal feuds and frustrations, not strategic planning to reroute trade. He has accused Brazil of carrying out a “witch hunt” against his political ally, former President Jair Bolsonaro, who is facing trial for attempting a coup. Mr. Trump also said Brazil discriminated against American tech companies and other exports.
With India, Mr. Trump lost patience in negotiations after the country refused to open up domestically sensitive agriculture markets to U.S. exports, and rejected his claim that his personal mediation brought about a cease-fire with Pakistan.
Nisha Biswal, a partner at the Asia Group, said 50 percent tariffs would be “hugely disruptive” to both the United States and India, with the immediate impact on Indian businesses.
“The Indian textile and garment industry will be priced out of the U.S. market and will need to shift to other markets or shift production out of India to avoid the tariffs,” she said.
The biggest impact will be the uncertainty that the tariffs create for firms that have been seeking to move production from China to India, especially for emerging technologies, Ms. Biswal said.
“Very hard to have a trust initiative where there is no trust,” she said.
It remains to be seen whether these tariff rates will be altered in the coming months. The United States and India could still find a way out of their impasse, Ms. Biswal said, perhaps in meetings at the U.N. General Assembly in New York in September. But the unpredictability of Mr. Trump’s use of tariffs has made it hard for businesses to seek out reliable places to manufacture their products.
Stephen Lamar, the president of the American Apparel & Footwear Association, said the companies in his trade association, which includes Ruthie Davis, had been receiving “conflicting messages” about how and where they should diversify.
He pointed out that longstanding government programs that provided incentives for companies to manufacture in Haiti and Africa were set to expire soon.
“It’s like, ‘Wait a minute, I thought you wanted us to leave China,’” Mr. Lamar said. “You don’t know where you should diversify to, if the countries you thought were going to be the safe alternatives a couple months ago are not the safe alternatives.”
About Ms. Davis’s manufacturing in Brazil, Mr. Lamar said, “This was a bet that didn’t seem like a losing bet a couple of months ago.”
Ms. Davis did not always produce in Brazil. For years, she worked for larger brands, including Reebok, UGG and Tommy Hilfiger, visiting factories in China, Brazil and Italy. In 2006, she started her own company, using factory connections in China. But the luxury shoe business had disdain for Chinese goods, and she quickly moved her manufacturing to Italy.
A decade ago she was approached by a Brazilian factory that convinced her it could handle the intricacies of luxury shoemaking, at a lower price point.
“When I first started, I wasn’t proud to put ‘Made in Brazil’ on the bottom of my shoe, because it was a little rough around the edges,” she said. But over many years, Brazil built a very competitive shoe industry. That involved the web of suppliers that such factories depend on, including factories that make leather and molds, stich together patterns and concoct a kind of glue that Ms. Davis describes as “Super Glue on steroids.”
That web of suppliers is why Ms. Davis, who has been called “the queen of heels,” thinks it will be impossible to move manufacturing for her type of shoes to the United States anytime soon.
“If you look at these people working in the White House, the women are wearing nice shoes. Are they willing to give those shoes up?” she asked. “Because we will not be making shoes in America.”
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
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