The report notes that the company is looking to optimise its sourcing mix and allocate production differently across countries
To mitigate the impact of the United States (US) tariffs on imports, Nike is looking to reduce its reliance on production in China for the US market, Reuters reported. The report noted that US President Donald Trump’s tariffs on imports from important trading partners could add around USD one billion to Nike’s costs.
Noting the significance of China as an import hub, the company said that it accounts for around 16 per cent of the shoes Nike imports into the United States. However, the company is looking to cut the figure down to a high single-digit percentage range by the end of May next year. The company is working to move China production to other countries.
The report noted that the company is aiming to optimise its sourcing mix and allocate production differently across geographies. The tariff dispute between the two economies has resulted in consumer goods being among the most affected areas.
To deal with the tariff impact, the company will evaluate corporate cost reductions. For some products in the US, the company has already informed prices increases. The report also mentioned that with other players in the sportswear industry also expected to increase prices, Nike may not lose much ground.
The report emphasised that Nike has invested in running shoes such as Pegasus and Vomero and scaled back production of sneakers like the Air Force 1.
