Nike has announced that U.S. President Donald Trump’s tariffs on key trading partners could increase its operational costs by as much as $1 billion this year. The sportswear giant indicated that it would need to adapt its supply chain to mitigate this financial blow, particularly by reducing its dependence on Chinese manufacturing. In an effort to shield its profit margins, Nike plans to raise prices on certain products, including trainers and apparel, beginning early June.
The unexpected news comes as Nike reported a smaller-than-anticipated drop in revenue for the first quarter, with shares rising more than 10% in extended trading. However, their recent earnings still reflect the company’s lowest quarterly figures in over three years, with fourth-quarter revenue reported at $11.1 billion. Chief Financial Officer Matthew Friend reiterated the company’s strategy, noting a significant shift in production away from China, which currently contributes to 16% of all Nike footwear sold in the U.S. By May 2026, that percentage is expected to drop to the “high single-digit” range.
This pivot in production aligns with President Trump’s administration’s tariffs, which were dramatically announced on April 2 as part of a sweeping “Liberation Day” campaign affecting global imports. Although Trump later suspended many of these tariffs to facilitate negotiations with affected nations, the questions surrounding their future persist, especially with the 90-day pause approaching its expiration on July 9.
During remarks at the White House, Trump maintained a positive stance on trade dialogues, highlighting agreements both with China and anticipated ones with India. Nevertheless, he also conveyed a firm approach, stating, “We’re not going to make deals with everybody,” suggesting a potential for high tariffs to remain in effect unless satisfactory agreements could be established. Meanwhile, Commerce Secretary Howard Lutnick confirmed that the recent agreement with China included crucial commitments, ensuring ongoing deliveries of rare earth minerals vital for various industries, from aerospace to renewable energy.