Nike says US President Donald Trump’s tariffs on key trading partners could increase its costs by around $1 billion this year.
In response, the sportswear giant plans to reduce its reliance on Chinese manufacturing, where 16% of its US-bound footwear is currently produced. That figure is expected to fall to a “high single-digit percentage” by May 2026, reports BBC.
Last month, Nike announced price hikes on some US products, following a similar move by rival Adidas, both citing rising costs from tariffs. Despite the challenges, Nike shares jumped over 10% in extended trading after the company forecast a smaller-than-expected drop in first-quarter revenue. Its fourth-quarter earnings of $11.1 billion, while the weakest since Q3 2022, still exceeded analyst estimates.
Trump introduced sweeping “Liberation Day” tariffs on April 2, later pausing most for 90 days to allow trade talks. That pause, set to expire on July 9, reduced tariffs to 10% from significantly higher levels. While Trump claimed progress in talks with China and hinted at a potential deal with India, he also warned that some countries would face tariffs of up to 45% without negotiation.
Commerce Secretary Howard Lutnick confirmed that a new agreement with China includes a commitment to supply rare earth minerals vital for US industries. Meanwhile, Treasury Secretary Scott Bessent suggested the tariff pause could be extended, and White House spokesperson Karoline Leavitt said Trump is ready to present new deals with adjusted tariff rates.
Trade tensions with China escalated in April before both countries agreed to scale back—but not eliminate—retaliatory tariffs. A White House official later confirmed a new framework under the Geneva agreement aimed at stabilizing trade and ensuring US access to critical resources.