Nike says new U.S. tariffs imposed by President Donald Trump could cost the company around $1 billion this year, prompting a major shift in its manufacturing strategy.
In response, the sportswear giant announced plans to reduce its dependence on Chinese factories, currently responsible for 16% of its U.S. footwear production, cutting that figure to the “high single digits” by May 2026.
The tariffs, part of Trump’s sweeping “Liberation Day” trade policy unveiled in April, targeted imports from key U.S. trading partners. Though the White House later paused the most severe measures for 90 days to pursue negotiations, companies like Nike are already bracing for long-term impacts.
In early June, Nike raised prices on some sneakers and apparel in the U.S., a move foreshadowed by Adidas, which had issued similar warnings. Despite these pressures, Nike posted stronger-than-expected earnings, with Q4 revenue at $11.1 billion. Although this marked the company’s weakest quarterly result in over three years, its forecast for a smaller revenue dip than analysts feared sent shares up more than 10% in after-hours trading.
Chief Financial Officer Matthew Friend emphasized that the shift away from Chinese manufacturing was a direct response to the escalating trade tensions. “We’re repositioning our supply chain to ensure resilience and manage cost exposure,” he said.
Meanwhile, President Trump has defended his tariff strategy, saying talks with China and India are progressing, though he warned that not all countries will reach agreements. “Some we’re just going to send a letter, thank you very much, you’re going to pay 25, 35, 45%. That’s the easy way,” he said.
Commerce Secretary Howard Lutnick confirmed that a recent deal with China includes Beijing’s commitment to deliver rare earth minerals, a critical component for high-tech manufacturing.
With the July 9 deadline for the tariff pause approaching, uncertainty looms over whether the White House will extend negotiations or revert to harsher trade measures. For global brands like Nike, the pressure to adapt quickly remains high amid shifting trade policies and rising geopolitical tensions.
