Nike Warns Trump-Era Tariffs Could Add $1 Billion to Operating Costs

Global sportswear giant Nike has warned that import tariffs introduced under U.S. President Donald Trump’s trade policies could inflate its operating costs by as much as $1 billion this year, prompting a significant shift in the company’s supply chain strategy.

Nike’s executives said the company is moving swiftly to reduce its dependence on Chinese manufacturing, which has been heavily targeted by the latest round of U.S. tariffs. The firm plans to slash the share of its U.S.-bound footwear made in China – from the current 16% – to a “high single-digit percentage” by May 2026, according to Chief Financial Officer Matthew Friend.

The company’s statement comes amid ongoing uncertainty over the future of Trump’s so-called “Liberation Day” tariffs, imposed in April on a broad range of imports. Although many of the duties were later paused for a 90-day window to allow space for negotiations, the temporary relief is set to expire on July 9, placing businesses like Nike in limbo.

Despite the tariff concerns, Nike’s share price rose more than 10% in after-hours trading following the release of its quarterly results. Although fourth-quarter revenue of $11.1 billion marked its lowest since early 2022, earnings exceeded analyst expectations, and the company’s forecast for the next quarter was more optimistic than anticipated.

To offset rising costs, Nike said it had already begun increasing prices on select footwear and apparel items in the U.S., following a similar move by rival Adidas, which also blamed tariffs for the price hikes.

The broader business community remains on edge as the White House mulls its next move. Speaking on Thursday, President Trump insisted that trade negotiations were proceeding positively, noting that an agreement with China had been reached and hinting at a possible deal with India. Still, he warned that not all countries would receive favourable terms.

“For some, we’re just going to send a letter – ‘thank you very much, you’re paying 25%, 35%, 45%.’ That’s the easy way,” Trump said, while also suggesting that his advisers prefer a more deal-focused approach.

Commerce Secretary Howard Lutnick confirmed that the U.S.-China agreement includes commitments from Beijing to maintain exports of critical rare earth minerals – vital for manufacturing in sectors ranging from defence to clean energy.

With the July 9 deadline looming, Treasury Secretary Scott Bessent has not ruled out extending the temporary pause on tariffs, depending on the progress of trade talks. However, White House Press Secretary Karoline Leavitt said the date was “not critical” and that the administration remains prepared to offer new terms to trading partners.

Meanwhile, Nike’s move to diversify its manufacturing base is seen as part of a broader industry trend as companies recalibrate global supply chains in response to geopolitical and economic pressure.

Although Nike did not specify where production would be redirected, countries such as Vietnam, Indonesia, and India are likely beneficiaries as manufacturers look to avoid the fallout from ongoing trade tensions between the U.S. and China.