Footwear brand, Nike loses $10 billion in valuation over Trump tariffs 

The new tariffs have sent shockwaves through the apparel and footwear industries, causing Nike’s stock to plummet by more than 13% in pre-market trading on Thursday.

This dramatic decline has wiped out around $10 billion in market value for the company.

The catalyst for this upheaval came from Trump’s “Liberation Day” press conference on Wednesday, where he unveiled new trade measures that could have lasting effects on global supply chains.

The U.S. will impose a 46% tariff on imports from Vietnam, a country that plays a pivotal role in Nike’s production operations. According to Nike’s fiscal 2024 report, nearly half of its footwear is manufactured in Vietnam.

In addition, China, another major supplier for the company, will face a 34% tariff on its exports to the U.S., further complicating Nike’s supply chain. These tariffs are in addition to previously imposed tariffs on Chinese goods, further escalating the financial pressure on companies that rely on these regions for production.

Nike, however, isn’t alone in feeling the effects. Other apparel and footwear companies also saw their stock prices take a significant hit. Lululemon, known for its athleisure wear, saw its shares drop by nearly 15%, while Deckers, the parent company of Uggs and Hoka sneakers, saw a decline of over 14%. Retailers like American Eagle and Abercrombie & Fitch also experienced notable drops, with their shares falling 9% and 11%, respectively.

The sell-off in these stocks reflects broader concerns about the potential economic impact of the new tariffs, particularly as companies are forced to confront the reality of higher production costs.

The impact on Nike and other companies with significant exposure to Southeast Asia’s manufacturing hubs is becoming increasingly clear. As costs rise, these companies will need to find ways to mitigate the damage, whether through negotiating with suppliers, cost-cutting measures, or raising prices.

As these tariffs come into effect, with the baseline 10% tariff starting on Saturday and the country-specific levies to follow in April, companies in the apparel and footwear sectors are bracing for a period of uncertainty. Nike, along with other major brands, will need to navigate these new challenges carefully to maintain profitability and continue their global operations.