WASHINGTON/HANOI, April 18 – U.S. sportswear giant Nike could be hit with new tariffs as President Donald Trump prepares to announce fresh trade measures targeting countries with large trade surpluses, including Vietnam—a major manufacturing base for the company.
Vietnam, which recorded a $123.5 billion trade surplus with the United States, is widely expected to be in the crosshairs of the new tariff regime aimed at bolstering domestic production and reducing America’s trade deficits. The move comes at a challenging time for Nike, which is struggling with declining sales and increased competition.
Nike produced 50% of its footwear and 28% of its apparel in Vietnam during its 2024 fiscal year, according to its annual report. Rivals such as Adidas are also heavily reliant on Vietnamese production, sourcing 39% of its footwear and 18% of its apparel from the Southeast Asian nation.
“The risk for Nike is substantial,” said David Swartz, an analyst at Morningstar. “If tariffs are extended there, then Nike’s got a problem.”
Current U.S. tariffs on Vietnamese footwear average 13.6%, while apparel faces duties of around 18.8%, based on January 2025 trade data analyzed by Sheng Lu, professor of fashion and apparel studies at the University of Delaware. Additional tariffs could compel Nike to either absorb higher costs or raise prices—a tough decision amid ongoing discounting efforts to clear excess inventory.
The expected tariffs come as Nike continues to lose market share to newer players like On and Hoka, whose product lines are resonating more with younger, performance-driven consumers. Nike executives recently forecast another quarterly revenue decline, citing macroeconomic headwinds and evolving consumer trends.
Swiss performance brand On could be even more exposed, sourcing 90% of its shoes and 60% of its apparel from Vietnam in 2024. “Our premium brand gives us the ability to adapt our pricing thoughtfully,” said COO Samuel Wenger, noting that tariff risks are factored into pricing decisions.
Average sneaker prices in the U.S. have risen by 25% since 2019, according to market research firm Circana. While running shoe sales have climbed 16% to $7.4 billion since 2021, weakening consumer confidence may limit brands’ pricing flexibility.
Shifting manufacturing away from Vietnam presents logistical and financial hurdles. Neighboring countries like Cambodia and Indonesia are also under scrutiny and are experiencing cost inflation due to increased demand. Michael Yee, CEO of Hong Kong-based MGF Sourcing, said Cambodian factories are raising prices by 5% to 10% as more companies seek alternatives to China and Vietnam.
Nike, Adidas, and Amer Sports declined to comment on the potential tariff impact. Lululemon and Columbia Sportswear did not respond to Reuters’ requests for comment.
Despite being a likely target, analysts say Vietnam may avoid the steep tariffs imposed on Chinese goods, thanks to strategic diplomatic efforts. Hanoi has pledged to increase U.S. imports, reduce duties, and approved operations for Starlink, Elon Musk’s satellite internet firm. Trump-affiliated businesses are also reportedly exploring investments in Vietnam’s real estate and hospitality sectors.
“Vietnam has proven its ability to play the geopolitical game very skillfully,” said Johannes Loefstrand, portfolio manager at T. Rowe Price. Former U.S. Commerce Secretary Wilbur Ross suggested that the Trump administration may temper its approach, particularly on consumer goods. “People notice the cost of apparel because they buy it fairly frequently,” Ross said.
