When President Donald Trump imposed sweeping tariffs on imports in April, the shock rippled quickly through the U.S. leather industry. At Twisted X, a Texas-based bootmaker known for its Western footwear, the disruption hit with major impact, according to a CNBC report.

Import costs on finished work boots surged almost overnight. Shipments already en route were paused mid-transit. Invoices fluctuated so sharply that staff at the company’s Decatur, Texas headquarters found themselves recalculating margins hour by hour. Management converted a conference room into what executives dubbed a “tariff war room,” a sign of how fast-moving and unpredictable the situation had become.

“A lot of other leather companies had to pause shipments because of the chaos and it felt like prices were going all over the place before you could take account,” Twisted X chief executive Prasad Reddy said. “It was a very uncertain time.”

The turmoil at Twisted X has been mirrored across the leather sector, from small specialty retailers to global fashion houses. With pre-tariff inventories largely exhausted, the products now reaching store shelves are significantly more expensive to produce. Industry analysts say prices at the register are unlikely to retreat anytime soon.

According to projections by the Yale Budget Lab, prices for leather goods are expected to remain nearly 22% higher for at least the next one to two years. The increase is being driven by a mix of inflation, persistent supply chain bottlenecks, and heavy tariff exposure across key sourcing countries, including China, Vietnam, Italy, and India.

“The reason why leather is hit so hard is twofold,” said John Ricco of the Yale Budget Lab. “Some of the highest tariff rates are placed on countries where we import most leather. The second issue is that the U.S. simply imports far more leather and apparel-related products from these trading partners than it produces domestically.”

The pressure is already showing up in corporate earnings. Tapestry, which owns luxury brands including Coach and Kate Spade, told investors in August that tariff-related costs could reach $160 million, warning of stronger-than-expected pressure on profits.

A global supply chain under strain

The modern leather supply chain is deeply globalized. A typical pair of Twisted X boots begins as a raw cowhide from a U.S. ranch. That hide is salted and shipped overseas, often to Asia, to be tanned into leather. For Twisted X, around half of its products are currently tanned in China, down from about 90% in 2017, according to Reddy.

Once tanned, the leather is usually shipped again, often to factories in China, Vietnam, Mexico, or India, where it is cut, stitched, and assembled into finished boots before being sent back to the United States.

That system kept costs low for years. It also left companies highly exposed when tariffs hit.

“When tariffs happened, everything stopped,” said Kerry Brozyna, president of the Leather and Hide Council of America. “They couldn’t take shipments in because if they calculated the tariff into the price, they wouldn’t be able to sell the product.”

The U.S. already runs one of its largest manufacturing trade deficits in leather goods. In 2023, the country imported $1.37 billion worth of leather apparel while exporting just $92.7 million, according to Census Bureau data. China alone accounts for roughly one-third of all leather goods imported into the United States.

“Being so reliant on overseas production methods ended up hurting many people in the industry when they didn’t know exactly what was going to happen,” Reddy said.

He added that Twisted X has been working for years to reduce its exposure to China, a strategy that has become more urgent under the new tariff regime.

Exiting China, however, has not been straightforward. Companies shifting production encountered congestion and capacity limits in Cambodia and Bangladesh, longer lead times in Vietnam, and a new complication in August when a 50% tariff was imposed on many Indian leather exports. By late summer, costs had risen across nearly every stage of production, from hides and tanning to assembly and shipping back to the U.S.

“We saw all our channels to make boots keep getting more expensive until we were able to figure out a good solution,” Reddy said.

Footwear and fashion conglomerates are facing the same reality. Steve Madden said new tariffs weighed heavily on its third-quarter performance. “The quarter was challenging, driven largely by the impact of new tariffs on goods imported into the United States,” chief executive Edward Rosenfeld told analysts in November.

Passing costs to consumers

Many companies initially tried to absorb higher costs, but that buffer is wearing thin. Twisted X said it raised prices by about 1% to 3% this year, a move the company described as relatively modest compared with some competitors.

“We look at it as a success,” said Tricia Mahoney, the company’s chief marketing officer. “Many competitors were looking at bigger increases, but we prioritized our customers and tried to keep prices as stable as possible. Next year could be tough, but we are more prepared than ever.”

At the luxury end of the market, price increases are already visible. Chanel’s Classic Flap bag is now roughly 5% more expensive than it was a year ago after another round of price hikes this spring, according to luxury retail pricing data.

Analysts say the sharper impact is likely still ahead. Ricco expects prices for leather footwear and accessories to rise about 22% over the next year or two, with a longer-term increase of around 7% as higher tariffs, freight costs, and tight supplies of premium hides work their way through the system.

“2026 is probably where rubber meets the road,” Ricco said. “Companies will have to decide whether to pass costs on to consumers, cut jobs or reduce payments to shareholders.”

Fewer cattle, fewer hides

Compounding the tariff shock is a shortage of raw materials. The U.S. cattle herd is at its smallest level since the 1950s, following years of drought, rising feed costs, and herd liquidation. Since hides are an unavoidable byproduct of beef and dairy production, fewer cattle translate directly into fewer hides, even as global demand for high-quality leather remains strong.

“Fewer cattle means the hides that are available are more expensive,” Reddy said, noting the effect on premium boots made with high-grade leather.

Consumers hoping to switch to cheaper synthetic alternatives may find little relief. Many faux-leather and polyurethane materials rely on petrochemical inputs sourced from Asia, which are also subject to new tariffs. Retailers and analysts say synthetic footwear and handbags are already seeing mid- to high-single-digit cost increases.

For an industry already operating on thin margins, the combination of tariffs, supply chain upheaval, and raw material shortages is reshaping pricing and production decisions. While companies like Twisted X have managed to contain increases for now, the leather industry broadly is bracing for a more painful adjustment ahead.

Artificial intelligence dominated headlines, investments, and wealth creation in 2025 like no other sector, transforming entrepreneurs into billionaires at an unprecedented pace and solidifying AI’s role in everyday work and life.

According to Forbes, more than 50 new billionaires emerged from the AI ecosystem this year, driven by explosive valuations, massive funding rounds exceeding $200 billion globally, which captured 50% of all venture capital, up 16% from 2024 per Crunchbase, and infrastructure commitments rivaling national budgets. The year kicked off with a shockwave in January when Chinese startup DeepSeek released an open-source large language model trained with dramatically less compute than U.S. counterparts, sending ripples through markets and instantly elevating founder Liang Wenfeng to billionaire status with an estimated net worth of $11.5 billion.

U.S. frontrunner Anthropic, developer of the Claude model family, raised $3.5 billion early in the year at a $61.5 billion valuation, propelling all seven cofounders—including siblings Daniela and Dario Amodei—into the billionaire ranks for the first time. The company went on to secure a total of $16.5 billion in funding across rounds, culminating in a September valuation of $183 billion.

Infrastructure became the year’s defining theme. In January, President Donald Trump announced the $500 billion Stargate data center initiative involving OpenAI, SoftBank, and Oracle—sparking a cascade of commitments from tech giants. Meta, Alphabet, and Microsoft each pledged upwards of $65 billion toward AI compute facilities, fueling a data center construction frenzy that minted over a dozen new billionaires among suppliers and enablers.

Semiconductor networking firm Astera Labs saw its cofounders enter billionaire territory amid surging demand for high-bandwidth interconnects. Data center real estate player Fermi and Korean manufacturers ISU Petasys (chips) and Sanil Electric (transformers) similarly benefited from hyperscaler buildouts. Cloud provider CoreWeave, backed by Nvidia, achieved multibillion-dollar status, enriching its founders through explosive growth in GPU cloud services.

The talent and data wars intensified. In June, Meta acquired a 49% stake in data labeling leader Scale AI for over $14 billion, valuing the company at approximately $29 billion. The deal appointed 28-year-old CEO Alexandr Wang—already a billionaire since 2022—as Meta’s chief AI officer, while briefly making cofounder Lucy Guo (31, departed 2018 but retained equity) the world’s youngest self-made female billionaire at $1.4 billion.

Rivals filled the vacuum: Surge AI founder Edwin Chen reached an estimated $18 billion net worth via his 75% stake in the company, which hit a $24 billion valuation on $1.2 billion in 2024 revenue. Data labeling startup Mercor soared to $10 billion in October after a $250 million round, turning its three 22-year-old cofounders into the youngest self-made billionaires ever, each worth around $2.2 billion.

Multimodal AI captured imaginations in September with OpenAI’s Sora 2 launch, flooding social media with hyper-realistic generated videos and images. Billions flowed into image, video, and audio startups, notably ElevenLabs, whose AI voice synthesis platform raised $100 million at a $6.6 billion valuation in October, minting billionaires out of cofounders Mati Staniszewski and Piotr Dabkowski.

Workplace adoption accelerated dramatically: Gallup surveys showed weekly AI usage doubling from 11% in 2023 to 23% in 2025, with even higher penetration among developers. Microsoft CEO Satya Nadella—himself newly minted a billionaire through stock performance—revealed up to 30% of the company’s code was AI-generated. Coding tool Cursor from Anysphere reached a $29 billion valuation in November, creating four new billionaire cofounders.

Companies heavily leveraging AI, including video game developer Paper Games, translation software firm TransPerfect, and Chinese robotics maker Orbbec, propelled their founders into the billionaire ranks. As AI permeates industries from software to manufacturing, 2025’s wealth creation wave, fueled by unprecedented capital concentration and technological breakthroughs, marks the sector’s transition from hype to economic powerhouse. It has reshaped global billionaire lists and is expected to set the stage for even greater transformations ahead.