Progressive mega-brand suffers stock slump over fears Trump will make Chinese imports pricier

Nike shares fell 3 percent yesterday after Donald Trump’s victory – on fears his tariffs will push up the prices of imported sneakers and sportswear.

While Trump, a self-described “believer in tariffs,” sees them as necessary, experts warn they could backfire on companies like Nike. Tariffs are government taxes on imported goods and typically lead to higher retail prices unless companies reduce profit margins.

“The tariff proposals pose a serious threat to many businesses and brands,” Global Data’s Neil Saunders told DailyMail.com.

“If they were implemented at the levels President Trump has talked about, they would cause some financial harm to Nike, which still produces most of its products abroad.”

During his recent campaign, Trump proposed imposing tariffs of 60 percent or more on Chinese imports. He stated in an interview with Fox News, “We have to do it.”

Companies are beginning to fear that prices for Chinese imports will rise after Trump’s victory

Many of Nike’s products come from China.

The Oregon-based sportswear giant has already suffered multiple stock declines this year and struggled with weak sales and challenges in the Chinese market.

Saunders added that Trump’s threats could be a bargaining chip for the newly elected president.

“Trump uses the tactic of making threats as a negotiating position, so there is no guarantee that tariffs will be implemented at such a high level.

“That said, there will likely be some tariffs in some form, and Nike will have to adjust its supply chains or pricing in response.”

This 60 percent tax on Chinese imports, along with a 20 percent global tariff, could also increase average U.S. household costs by $3,000 by 2025, according to an October analysis by the Center for Tax Policy.

One of Nike’s notable stock declines this year was the 20 percent price drop on June 28, after the company announced it expected sales to decline.

The decline was the worst day in its 44-year history as a publicly traded company, according to the company Forbes.

UBS analysts led by Jay Sole wrote to clients that Nike’s “fundamental trends are much worse than we realized” and “there will not be a quick recovery for Nike’s profits.”

Nike shares fell again by more than 6 percent on October 2, after third-quarter revenue of $11.59 billion fell short of analysts’ estimated revenue of $11.65 billion.

“A comeback on this scale takes time, and while there are some early wins, we still have to turn the corner,” Nike CFO Matthew Friend said. Yahoo Finance last month.

“Nike has been really warning us since late last year that the sportswear market wasn’t very strong and the innovation cycle wasn’t looking particularly good going into fiscal 2025,” Morningstar equity analyst David Swartz told Yahoo Finance.

“Right now, Nike is in a situation where it’s not launching many new products, and the company is pulling back on some other products.”

Shares of Nike rose 10 percent later that month after the company announced that Elliot Hill would replace John Donahoe as CEO on October 14.

By 2024, only 16 percent of Nike apparel and 18 percent of footwear will be made in factories in Chinaaccording to Oregon Live.

Only 16 percent of Nike footwear was made in China this year

Trump proposed a tariff of at least 60 percent on Chinese imports

One of Nike’s notable stock declines was its 20 percent price drop on June 28, 2024 – the worst day in its 44-year history as a publicly traded company

Shares of Nike rose 10 percent in October 2024 after the company announced that Elliot Hill would become their new CEO

“Nike has reduced its exposure to China in recent years, which is positive as it is one of the key countries potentially targeted by Trump,” Saunders told DailyMail.com.

“All of this is scaring investors, but it is important to understand that at this point these are just words and not firm policy proposals.”

If these tariff proposals go through, it would also affect product prices for companies like Columbia Sportswear.

Tim Boyle, CEO of Columbia Sportswear, explained that he expects prices to increase if the rate is increased The Washington Post in October 2024.

“We’re buying stuff today for delivery next fall,” Boyle said.

“So we’re just going to deal with it and we’re just going to raise prices. … It’s going to be very, very difficult to keep products affordable for Americans.”