Nike Cuts Production in China Due to Trump Tariffs: Who Will Pay the Price?
Did you know that Nike, one of the world’s largest sportswear manufacturers, is cutting production in China because of tariffs imposed by Donald Trump? Yes, you read that right! About 16% of Nike’s footwear sold in the US comes from China, the country most affected by these tariffs.
What’s Going On?
Nike plans to reduce production in China by a high single-digit percentage by the end of May this year. The company intends to shift production to other countries to soften the financial blow. CFO Matthew Friend stated that the company will optimize its sourcing mix and redistribute production to avoid additional costs that could reach around one billion dollars!
How Are Trump’s Tariffs Hitting Nike?
The tariffs imposed by Donald Trump are like a ball and chain for Nike. Import costs from China have risen, directly impacting product prices in the US market. Nike has already raised prices on some products in the US to offset the financial hit.
Is Nike Sinking or Swimming?
Despite a 12% drop in revenue to $11.1 billion in the fourth quarter last year, Nike’s results beat analysts’ expectations. CEO Eliot Hill highlighted that the running segment is regaining growth thanks to investments in new models like Pegasus and Vomero. The marketing budget increased by 15% compared to last year, showing Nike isn’t giving up easily.
China Isn’t Backing Down
China, on the other hand, strongly opposes unilateral trade actions by the US. China’s Ministry of Commerce has made it clear that the country will take decisive countermeasures to protect its legitimate rights and interests, further complicating the situation.
Trump Isn’t Backing Off
Donald Trump has stated he does not plan to extend the 90-day pause on tariff implementation, meaning trade penalties will take effect after July 9 if no agreement is reached. He promised to send “a lot of letters” to countries that do not cooperate.
What Does This Mean for Us?
This trade drama between the US and China affects the global economy, and consumers can expect higher prices. Nike, as one of the biggest brands, has already raised prices in the US, and this may impact other markets as well.
Conclusion
Nike is caught in the whirlwind of the US-China trade war. While the Trump administration holds firm on tariffs, Nike tries to adapt by redistributing production and raising prices. China refuses to back down and threatens countermeasures. All this could lead to higher prices and less choice for consumers.
What do you think? Will Nike survive this trade storm? Or will Donald Trump’s tariffs end up hurting American consumers? Drop a comment — maybe together we’ll find an answer or at least a good joke about this global soap opera!
Sources: biznis.kurir.rs, danas.rs, tanjug.rs, blic.rs
