Thu, May 23, 2024

Nike And Other Footwear Giants on Trump’s Tariff

Nike and its results

Nike Inc. and other footwear companies like Adidas AG asked President Donald Trump to reassess his tariffs on shoes made in China. The footwear companies stated the policy is catastrophic for consumers, companies, and the whole American economy.

A total of 173 companies, including Nike and Adidas, signed the open letter to the U.S. president. The date of the letter was last Monday. And it was posted on the website of the industry trade association.

A part of the letter reads, “We ask that you immediately stop this action to increase their task burden.”

The complaint was due to the escalating tension between the U.S. and China. And Trump threatens a tariff hike as high as 25% on Chinese including all kinds of footwear.

However, China continues to be a shoe giant despite the shifting production of the U.S. and Europe and their eagerness to make more goods at home.

Manufacturing Footwears

For instance, Adidas obtained around 18% of its 409 million pairs last year from China. While Vietnam is at 42% and Indonesia made 28% of them. In addition to that, independent manufacturing partners operate the majority of production sites.

The footwear giant manufactured 3% of its shoes in Europe and America. Adidas AG built speed factories that use robots to churn out high-end shoes in a single day. But Asia makes most of Adidas’ product such as sneakers, apparel, and sports equipment.

The footwear industry sees the issue in tariff as a dilemma. It is because these companies are paying some of the highest duties in the U.S. And some longstanding tariffs are above 30%.

The Footwear Distributors & Retailers of America, the U.S. shoe industry’s association, measured a $7 billion addition in the tariffs for U.S. customers per year. The companies letter stated that the tariff hike has a negative impact on working-class individuals.

The letter stated that Trump’s proposal to add tariffs on all Chinese imports is like asking American consumer to foot the bill.

And the letter was also delivered to Treasury Mnuchin, Commerce Secretary Wilbur Ross, and National Economic Council director Larry Kudlow.

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