Nike to Increase Prices Amid Tariff Uncertainty

Nike's upcoming price hikes, primarily affecting footwear and apparel, reflect ongoing trade tensions and tariff implications.

Nike is preparing to implement price increases on some of its sneakers and apparel in the United States beginning on June 1. This move comes shortly after rival Adidas announced similar pricing adjustments due to the repercussions of tariffs. Although Nike did not specify US tariffs as the direct cause of this increase, it noted that price adjustments are part of its regular business evaluations.

The majority of Nike’s products are manufactured in Asia, an area significantly impacted by tariffs imposed during former President Donald Trump's administration. The US has postponed additional “reciprocal” tariffs until July, but the baseline 10% tax on imports remains applicable to a broad range of goods from various countries.

Typically, tariffs are levied on imports and are generally borne by the companies bringing the goods into the country rather than the manufacturers. Instead of absorbing these costs, it is common for importers to transfer them to consumers. In response to price rises linked to tariffs, Trump recently criticized companies such as Walmart, suggesting they shouldn't use tariffs as a scapegoat for rising prices given their substantial earnings.

In their statement regarding the upcoming price increases, Nike explained, "We routinely assess our business, making pricing adjustments as part of our seasonal strategy." During an investor call in March, Nike’s finance chief, Matt Friend, emphasized the need to navigate several factors contributing to economic uncertainty, including tariffs, while monitoring how these elements influence consumer confidence.

Starting June 1, Nike plans to increase the prices of most shoes priced over $100 by up to $10. Clothing and equipment will also see hikes ranging from $2 to $10. Notably, popular models like the Air Force 1 and items under $100, as well as children's products and select Jordan brand apparel and accessories, will remain unaffected by the increases.

Last month, Adidas cited Trump-imposed tariffs as a reason for potentially rising prices in the US market for their sneakers, including the popular Gazelle and Samba lines. Earlier this week, UK retailer JD Sports also warned that heightened prices due to tariffs in the US could diminish customer interest.

As global companies grapple with the unpredictability of the Trump administration's trade policies, many are facing the repercussions of recently put-off steep tariffs that are currently under negotiation. Countries such as Vietnam, Thailand, and China – significant locations for manufacturing goods – are expected to encounter some of the highest US import taxes, ranging from 32% to 54%.

Nike notably depends on Vietnam for its production, with factories there accounting for 50% of its footwear and 26% of its apparel. The tariffs placed by Trump on Vietnam reached 46%, affecting its vital manufacturing sector. Coinciding with these developments, Eric Trump is visiting Vietnam, following the government’s approval of a $1.5 billion investment from the Trump Organization in local luxury development projects.

In an unexpected twist, Nike announced it would start selling products on Amazon in the US for the first time in four years after previously ceasing sales to focus on its official channels. This shift arises amidst a decline in its online sales, with the latest results showing a notable drop, particularly in the European and Asian markets. As part of an ongoing effort to revitalize the brand, Nike has brought back Elliott Hill to lead a strategic turnaround focused on key markets such as the US, UK, and China.