Nike has cautioned the US President that impending trade tariffs may cost the company an additional $1 billion, necessitating price hikes on footwear and clothing. In response to these tariffs, Nike plans to cut its production imported from China, reducing it from approximately 16% to a 'high single-digit range.' CFO Matt Friend emphasized the importance of optimizing their sourcing mix to manage these new costs, highlighting that manufacturing capabilities in China remain a critical part of their supply chain strategy.
These tariffs represent a new and meaningful cost headwind.
We will optimise our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States, despite the current elevated tariffs for Chinese products imported into the United States.
Manufacturing capacity and capability in China remains important to our global source base.
Nike warned they will raise prices on some of their footwear and clothing, and they will reduce their supply to China to the US to bring down costs.
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