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Nike anticipates that tariffs imposed by former U.S. President Donald Trump on key trading partners could inflate its costs by approximately $1 billion this year.
Executives at the sportswear giant also indicated plans to decrease their reliance on manufacturing in China, a strategic move designed to mitigate the impact of U.S. trade policies.
Last month, Nike announced it would be raising prices on select trainer and clothing lines in the U.S. starting in early June, following a similar warning from competitor Adidas about potential price hikes due to tariffs.
In separate developments, both the U.S. and China have reported reaching an agreement on the implementation of a previously established trade deal.
The agreement involves Beijing increasing its supply of rare earth minerals to the U.S. in exchange for the removal of certain export restrictions.
Shares of Nike experienced a surge of over 10% in after-hours trading, driven by the company’s forecast of a smaller-than-expected drop in first-quarter revenue, surpassing analysts’ projections.
The company’s earnings for the most recent three-month period also exceeded estimates, despite representing its weakest quarterly performance in over three years.
Nike reported fourth-quarter revenue of $11.1 billion, marking its lowest figure since the third quarter of 2022.
Chief Financial Officer Matthew Friend stated that the company would be shifting some production away from China, which had been significantly affected by tariff increases, to other countries in response to Trump’s policies.
Currently, China accounts for 16% of Nike footwear manufactured for the U.S. market. Mr. Friend indicated that this percentage would be reduced to a “high single-digit percentage range” by the end of May 2026.
In April, former President Trump announced comprehensive “Liberation Day” tariffs on a wide range of goods from various countries. These plans included tariffs of 46% on goods from Vietnam and 32% on items from Indonesia, both significant manufacturing hubs for Nike, even more so than China.
However, later that month, he suspended the majority of these tariffs to allow for negotiations with the affected countries, with a senior advisor promising “90 deals in 90 days.”
This action lowered tariffs to 10%, a significant reduction compared to the higher rates previously imposed on goods from many trading partners.
The White House is currently facing increasing inquiries regarding the president’s intentions regarding tariffs, as the 90-day suspension period is set to expire on July 9.
During remarks at the White House on Thursday, Trump asserted that negotiations were progressing favorably, highlighting the agreement reached with China and suggesting a potential agreement “coming up with India, maybe.”
However, he also cautioned, “We’re not going to make deals with everybody.”
“Some we’re just going to send them a letter, say, ‘Thank you very much. You’re going to pay 25, 35, 45%.’ That’s the easy way to do it,” he stated.
“My people don’t want to do it that way. They want to do some of it, but they want to make more deals than I would do,” he added.
Treasury Secretary Scott Bessent has previously suggested the possibility of Trump extending the deadline, depending on the progress of the negotiations.
On Thursday, White House spokesperson Karoline Leavitt stated that the deadline was “not critical” and that Trump was prepared to present countries with “deals” that would establish new tariff rates.
Earlier this month, the U.S. and China announced an agreement aimed at securing the U.S. supply of critical magnets and rare earth minerals, following concerns about access that had threatened to reignite trade tensions between the two major economies.
During the White House briefing on Thursday, Trump mentioned having “signed” a deal with China but did not provide further details. “The administration and China agreed to an additional understanding for a framework to implement the Geneva agreement,” a White House official later clarified.
Trade between the two countries had nearly ceased after Trump increased tariffs and China responded with retaliatory tariffs in April, significantly disrupting commerce between the two nations.
Subsequently, the U.S. and China agreed to reduce, but not eliminate, these tariffs.
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The US central bank leaves its key interest rate unchanged at 4.3%, as its view of the economy darkens.
India’s statement followed a phone call between Modi and Trump after the US president left the G7 summit.
The app was supposed to be banned in the US after its Chinese owner refused to sell it by a January deadline.
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