Sourcing Shifts: Sportswear Giants Hit by New Tariffs

U.S. President Trump's new tariffs have hit key sourcing markets for sportswear giants Nike, Adidas, and Puma. These companies may struggle to compensate for the tariffs, as production shifts away from China become less viable due to additional tariffs in Vietnam, Indonesia, and more.

Shares of major sportswear companies, including Nike, Adidas, and Puma, saw a significant fall on Thursday following President Trump's imposition of new tariffs. The tariffs, affecting critical sourcing markets such as Vietnam, Indonesia, and China, present fresh challenges for these global brands.

The increased tariff rates, peaking at 46% for Vietnam, could hike product prices by 10% to 12% as brands grapple with supply chain disruptions. In recent years, footwear companies had already begun sourcing more from Vietnam and other Asian nations due to US-China tensions.

The tariff hikes make shifting production sites less viable, according to UBS analysts, forcing brands to reconsider strategies. With Nike and Adidas heavily reliant on Asian manufacturing hubs, the economic impact on their operations and stock values is already evident.

(With inputs from agencies.)