The world’s largest footwear and apparel companies are facing a shock to their supply chains after President Donald Trump announced new tariffs on Vietnam and other critical production hubs.
The US imposed a 46% reciprocal tariff rate on Vietnamese goods on Wednesday as part of Trump’s growing trade war with countries around the world. Other new tariffs include 49% on Cambodia, 34% on China and 32% on Indonesia.
Nike Inc. and Adidas AG made big bets on Vietnam over the last decade. Today, about half of all Nike shoes and 39% of Adidas shoes are made in the country, according to regulatory filings. Vietnam is the largest supplier of footwear for both companies, and shoes produced in the country account for more than $20 billion in combined annual revenue.
Nike shares fell 6.4% in extended trading at 5:06 p.m. New York time. Lululemon Athletica Inc., which makes 40% of its products in Vietnam and 17% in Cambodia, tumbled almost 9.6% in late trading. Shares of Abercrombie & Fitch Co., which gets 35% of its merchandise from Vietnam and 22% from Cambodia, fell 7.7%. Gap Inc., which buys about 27% of its goods from Vietnamese factories and 19% from Indonesia, slid 11%.
Nike Moves Manufacturing
Vietnam now produces half the brand’s footwear
“More tariffs equal more anxiety and uncertainty for American businesses and consumers,” National Retail Federation Executive Vice President of Government Relations David French said on Wednesday. “Tariffs are a tax paid by the U.S. importer that will be passed along to the end consumer.”
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