Trump’s tariffs on Vietnam could spell trouble for Nike, Adidas

Potential US tariffs on Vietnam could threaten Nike and Adidas’ recovery amid rising production costs and shifting market dynamics

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Shoes for export are seen at a factory in Hanoi, Vietnam. Photo: Reuters

Published: 6:00am, 2 Apr 2025Updated: 9:23am, 2 Apr 2025

Nike could soon face another blow in its effort to revive its brand and reverse a long decline in sales: US tariffs on imports from Vietnam.

On Wednesday, US President Donald Trump is expected to announce which countries and products he will target with a new round of tariffs aimed at encouraging domestic production and coaxing other nations to buy more US goods.

Vietnam, which runs a US$123.5 billion trade surplus with the United States, is a prime target.

Nike is one of several sportswear brands heavily reliant on Vietnam as a production site, and higher tariffs would force the company to absorb higher costs or raise its prices at a time when it is already discounting some items to clear inventory.

Nike produced 50 per cent of its footwear and 28 per cent of its apparel in Vietnam in its 2024 financial year, according to its annual report. Rival Adidas is slightly less exposed, relying on Vietnam for 39 per cent of its footwear and 18 per cent of its apparel.

The average US tariff rate on footwear from Vietnam is 13.6 per cent, while the rate on apparel is 18.8 per cent, according to calculations based on January trade data made by Sheng Lu, professor of fashion and apparel studies at the University of Delaware.