Nike, Adidas Pass Trump Tariff Costs To US Customers

NDTV

11 hours ago

US President Donald Trump's sweeping new tariffs on imports from more than 90 countries came into effect on Thursday. It shook global supply chains and led to price hikes from some of the world's biggest brands, including Nike, Adidas, and Mattel.
The tariffs, which apply to goods entering the US from key trading partners like Vietnam, Indonesia, China, and Mexico, are already feeding into inflationary pressures at home.
The US consumer price index rose 2.7% in June, up from 2.4% in May, AP reported. Economists warn that the new trade measures could further accelerate costs for American households.
Adidas Hikes Prices
Adidas was one of the first global retailers to sound the alarm. The German sportswear giant confirmed in July that it will raise prices for US customers to offset an expected $218 million in additional costs triggered by the tariffs in the second half of 2025.
The company's largest sourcing partner, Vietnam, now faces a 20% tariff, while Indonesia, which accounts for 19% of Adidas' manufacturing, is subject to a 19% tariff.
"We feel the volatility and uncertainty in the world does not make this prudent," said CEO Bjorn Gulden, adding that Q2 results were already negatively impacted by the tariffs to the tune of "double-digit euro millions".
He added that while existing products may retain their current prices, new launches will be priced higher in the US.
Nike Shifts Sourcing
Adidas rival Nike had similar concerns. The company expects to absorb as much as $1 billion in additional costs due to the tariffs and has already implemented price hikes in the US, adding $5-$10 to many of its sneaker models.
Chief Financial Officer Matthew Friend said China, now subject to a 30% tariff, still accounts for around 16% of Nike's US imports. Nike plans to reduce that figure to a "high single-digit percentage" by May 2026, shifting production to less-exposed countries like Vietnam and Indonesia.
"We will optimise our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States," Friend said. He added that Nike was reviewing internal cost reductions to manage the financial impact.
Consumer Goods Take A Hit
Beyond sportswear, other major companies are also preparing to raise prices. Mattel, the US toy giant and maker of Barbie, announced it will increase prices due to the rising cost of Chinese imports. Retailers like Walmart, Shein, Temu, and automakers, including Ford, Volvo, and Subaru, are also warning of cost pass-throughs to US consumers.
Prices of goods made with imported parts are set to rise as the new US tariffs drive up production costs. Items like electronics, apparel, and toys, which are heavily reliant on foreign components, will be among the hardest hit. Analysts warn this could add nearly 1.8% to consumer prices, costing households an estimated $2,400 annually.
Stricter customs checks are also expected to cause border delays, especially as the US ends the duty-free status of small parcels under $800 starting August 29, Reuters reported. This will slow shipments, raise costs for businesses, and delay deliveries for consumers.
Countries hit with the highest tariffs include India (50%), Brazil (50%), China (30%), Canada (35%), and Switzerland (39%). India's tariff, due to take effect on August 27, was explicitly tied to its ongoing purchases of Russian oil, with Mr Trump threatening further action if those imports continue.