Tariff Turmoil: Global Sportswear Giants Face Margin Squeeze

The imposition of new tariffs by U.S. President Donald Trump on key sourcing markets in Asia has led to a sharp drop in shares of major sportswear companies like Nike, Adidas, and Puma. The tariffs could significantly impact profit margins and consumer spending in the sector.

Shares in major sportswear brands Nike, Adidas, and Puma plummeted on Thursday following U.S. President Donald Trump's announcement of new tariffs. The tariffs targeted key sourcing nations like Vietnam, Indonesia, and China, which play a crucial role in the supply chain for these companies.

Vietnam was hit with a 46% tariff rate, Cambodia with 49%, Bangladesh with 37%, and Indonesia with 32%. Meanwhile, tariffs on China were increased by 34 percentage points. Experts like Felix Dennl, an analyst at Metzler in Frankfurt, warn that these measures could slash profit margins by more than 10 percentage points across the sector.

In response, sporting goods companies may implement price hikes in the U.S. Nike and Adidas are heavily reliant on countries like Vietnam and Indonesia for their manufacturing needs. Other global retailers, such as H&M and Zara owner Inditex, were also affected, seeing dips in their share prices.

(With inputs from agencies.)