Link to Article: https://www.reuters.com/business/retail-consumer/us-tariffs-vietnam-would-be-blow-nike-other-sportswear-brands-2025-04-01/.
Nike is likely to face major issues in the attempts it has been taking to revitalize and revive its brand and sales in the United States as the Trump Administration is set to announce a new series of tariffs to aim at encouraging further domestic production over foreign, cheap labor. This will heavily affect major sportswear brands as a large variety of the corporations produce their clothing and sportswear in foreign states, such as Vietnam–with Vietnam running a ~123 billion US Dollar trade surplus with the U.S, which shows our heavy reliance on clothing imports from said state. It is reported that somewhere between 50% of its footwear and upwards of 30% of its apparel were produced in Vietnam as of last year, where Adidas only relied on Vietnam for 39% of its footwear and 18% of its apparel.
Tariffs already exist for importing from Vietnam, but that has not stopped major corporations involved in footwear, apparel and other commodities in using it for production in recent years, if tariffs are to be extended or hiked by this new administration however, it could pose an issue as Vietnam has become the popular alternative to offshore production in China, with most American manufacturers aiming to reduce their presence in the U.S trade rival. It is reported that Trump holds Vietnam in high graces, but due to the extended and high trade surplus Vietnam holds with the U.S, it may be hit with tariffs irregardless.
This could majorly affect Vietnam and its economy, as in recent years the manufacturing sector of Vietnam has boomed due the export of American apparel to be manufactured, produced, and shipped back to the United States in favor of domestic production due to labor and material costs. Whilst the Vietnamese government has remained silent on the subject, major corporations are awaiting tariff implications from the Trump Administration to be announced given many of their offshore factories in Vietnam. Nike is expected to see further spirals in their revenue in the oncoming quarters, where as other up-coming brands such as ‘On’ almost exclusively produce in Vietnam, it could greatly increase their already exorbitant shoe prices, and slow down supply for the oncoming future. It is unknown as to when the Trump Administration will announce its new round of tariffs, or entirely on that note, on which countries. Cambodia, Indonesia, and Vietnam are the most likely targets given that American manufacturing is look to reshore domestically where as major corporations remain heavily involved in foreign production.