Tariffs hit Nike: 1 billion in costs and price hikes for consumers
The company announced the extra costs due to the tariffs imposed by Trump, but also that it wants to reduce its dependence on China
2' min read
2' min read
When, shortly after returning to the White House, Donald Trump announced the first tariffs, one of the first companies to be affected was Nike. The sportswear giant's exposure to China was too great not to generate an effect.
Nike, after all, is something of a symbol of American industrial globalisation. Very low-cost footwear produced in Asia and sold for $200 in stores in Los Angeles.
Today, Trump's tariffs, for Nike, have an official cost. But also a way out.
On the one hand, the company is preparing for a cost increase estimated at around USD 1 billion due to the trade war triggered by Trump. On the other hand, it announced that it intends to reduce its manufacturing dependence on China and move part of its operations to other countries (news that, combined with a new target price, made the share jump 15% during trading).
The move comes at a particularly delicate time for the company, The numbers, in fact, tell us that Nike's value has dropped by about a third over the past year (precisely because of concerns about tariffs). And revenues for the fourth quarter, which ended in May, fell 12% to $11.1 billion. This is the worst quarterly performance in three years, with analysts even talking about 'the worst quarter in at least two decades'.
