Cliff Notes: Nike says Trump tariffs could cost it $1bn
- Nike estimates an additional $1 billion in costs this year if current US tariffs remain unchanged, prompting a potential price increase for consumers in the autumn.
- The company plans to reduce its reliance on Chinese imports, aiming to lower footwear production from China to a “high single digit” percentage.
- Nike has recorded its worst quarterly results in over three years, with revenues at $11.1 billion, amid criticism of its direct-to-consumer strategy and reliance on fashion trends.
- Analysts suggests this is a notice to stakeholders for poor perferomce and boycotts that have impacted the bottom line
Nike says Trump tariffs could cost it $1bn
Nike’s costs will go up $1bn (Β£728m) this year if US President Donald Trump’s tariffs remain at the current level, the company has told investors.
It follows a warning from the sports brand last month that it would raise prices due to the taxes imposed on imports.
Work to bring down costs is under way, including reducing supplies from China to the US.
It’s to reduce the amount of footwear made in China and imported to the US from 16% currently to a “high single digit” figure with Chinese supply being “reallocated to other countries around the world”.
On 2 April, Mr Trump announced country-specific tariffs which hit China hardest and escalated after several rounds of retaliatory rises.
After an agreement between Washington and Beijing the levy was brought down from a 145% tariff to 30% on Chinese goods.
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