Nike has warned that tariffs imposed by President Donald Trump could increase its production costs by up to $1 billion. In response, the global sportswear giant announced plans to significantly cut its reliance on Chinese manufacturing, which currently accounts for 16% of its US footwear supply.
Chief Financial Officer Matthew Friend confirmed that Nike would shift production away from China one of the hardest-hit nations under Trump’s tariff regime aiming to reduce China’s share to a “high single-digit percentage range” by May 2026. This strategic shift underscores the company’s effort to adapt to an increasingly volatile global trade landscape.
Last month, Nike said it would raise prices on some of its sneakers and apparel in the US starting June, following a similar announcement by Adidas. Both companies cited tariffs as a key driver behind the decision, signaling broader implications for consumers amid ongoing trade tensions.
Despite facing its worst quarterly results in over three years, Nike managed to surpass earnings expectations. The company posted fourth quarter revenues of $11.1 billion, the lowest since Q3 of 2022, but shares jumped over 10% in extended trading after it projected a smaller-than-expected revenue dip for the upcoming quarter.
Trump’s “Liberation Day” tariffs, announced on April 2, targeted goods from countries around the world. While most of the tariffs were suspended later that month to allow negotiations, the temporary 90-day pause is set to expire on July 9, leaving businesses in suspense.
President Trump has insisted that trade talks are progressing, referencing recent deals with China and discussions with India. However, he also hinted at a more aggressive stance if talks stall, saying some countries may simply be sent a letter and face tariffs as high as 45%.
Commerce Secretary Howard Lutnick confirmed a new agreement with China securing US access to vital rare earth minerals, essential for sectors ranging from aerospace to renewable energy.
As the deadline approaches, uncertainty looms over global supply chains. For Nike and other multinationals, diversifying production sources and bracing for potential cost surges remains key to staying ahead in a turbulent trade era.
