Adidas Increases Prices Amid Rising US Tariff Costs of €200 Million

Adidas faces a €200 million increase in tariffs, mainly affecting American customers, while reporting strong sales growth for 2023.

Adidas has announced that it will raise product prices for American consumers due to a significant increase in US tariffs, which the company estimates will cost them an additional €200 million (£173 million). The sportswear giant, based in Germany, revealed that nearly half of its products are manufactured in Asian countries like Vietnam and Indonesia. These nations have recently entered new trade agreements with the US that include heavy tariffs—20% on goods from Vietnam and 19% on those from Indonesia.

During the release of their latest financial results, Adidas CEO Bjorn Gulden stated that these tariffs "will directly increase the cost of our products for the US." He acknowledged uncertainty surrounding how such price increases might affect consumer demand amidst potential inflation caused by these tariffs. Currently, 27% of Adidas products come from Vietnam, while 19% are produced in Indonesia.

In May, Nike also announced plans to raise prices on some of its lines sold in the US, warning that tariffs could add approximately $1 billion (£730 million) to its total costs. Despite the adverse impact of tariffs, Adidas reported a 7.3% increase in sales, amounting to €12.1 billion for the first half of the year, with pre-tax profits soaring from €549 million to €1 billion. Notably, footwear sales surged by 9% in the second quarter of the year, while clothing revenue experienced a remarkable increase of 17%.

While President Trump has emphasized tariff imposition to promote domestic manufacturing, such measures have incited backlash from various global trade partners, including Germany. As the tariffs bite, German car manufacturers like Mercedes-Benz anticipate a nearly €420 million tax burden, while Porsche has reported price hikes of up to 3.6% to offset increasing import taxes. The impact of these rising tariffs extends beyond Adidas, compelling various sectors to reassess pricing strategies amidst heightened trade tensions.