American tariffs in Vietnam would be a blow to Nike and other sportswear brands

Nike could soon face another blow to his effort to revive his brand and reverse a long decrease in sales: US import tariffs of Vietnam.

On Wednesday, the president of the United States, Donald Trump, is expected to announce to which countries and products will be directed with a new round of duty Aimed at encouraging national production and convincing other nations to buy more US goods.

Vietnam, which has a commercial surplus of $ 123.5 billion with the United States, is a main objective.

Nike is one of several sportswear brands that depend largely on Vietnam as a production site and the highest rates would force the company to absorb higher costs or increase its prices at a time when it is already discarding some items to clean the inventory.

Nike produced 50% of its footwear and 28% of its clothes in Vietnam in its 2024 financial year, according to its annual report. Adidas rivalOpen a new tab It is slightly less exposed, depending on Vietnam for 39% of its footwear and 18% of its clothes.

The average US rate in Vietnam's footwear is 13.6%, while the clothing rate is 18.8%, according to calculationsOpen a new tab Based on January, the commercial data made by Sheng Lu, professor of fashion and clothing studies at the University of Delaware.

“If the tariffs extend there, then Nike has a problem,” said Morningstar analyst David Swartz.
Nike and Adidas are barely alone. Vietnam has become a high -tech running shoes center, sportswear and outdoor clothing, since brands have tried to reduce exposure to ChinaOpen a new tab.
LululemonOpen a new tabColumbia Sportswear and Amer SportsOpen a new tabThat Salomon and Arc'teryx have, they tell Vietnam as their best manufacturing country.

But potential tariffs arrive at a critical moment for Nike, which has lost the market share of competitors seen as cooler and more innovative, such as On and Hoka.

In a quarterly earnings call last month, financial director Matt Friend said that Nike's income was expected to continue falling next quarter.

That perspective was considered in the current tariffs, said Mari Shor, senior of Variable Income of Columbia Threadneedle Investments, which has Nike's actions. “But what happens if it gets worse?”

Some smaller and younger sportswear brands are even more exposed to Vietnam. The rapid growth brand in 2024 obtained 90% of its shoes and 60% of its clothing and accessories in the country.

The shoes are already expensive, selling for $ 130 to $ 330 per par, and Samuel Wenger, the brand's operations director, said the tariffs were among the factors on those considered when deciding the price. “Our premium brand gives us the ability to adapt our prices thoughtfully,” he told Reuters.

The average prices of the sneakers have already increased by 25% since 2019, partly due to the increase in production costs, said Beth Goldstein, an analyst at the shoe industry of the Circla market research firm.

Wilbur Ross, who served as Secretary of Commerce in the first Trump administration, said the president had generally good ties with Vietnam and had no reason to hit him with tariffs that would feel in Main Street.

“People notice the cost of clothes because they buy it quite frequently,” Ross told Reuters.