WASHINGTON – Nike expects to take a $1 billion hit to its operating costs this year due to tariffs imposed by President Donald Trump on goods from key trading partners. The sportswear brand says it’s already moving some production out of China and increasing prices in the U.S. to cushion the impact.
In a statement Thursday, Nike said the tariffs are pushing up the price of importing materials and finished products. Chief Financial Officer Matthew Friend confirmed the company is cutting its China-based manufacturing footprint, which now produces 16% of Nike’s U.S.-bound footwear.
“We expect to bring that number down to a high single-digit percentage by the end of May 2026,” Friend stated.
The cost increases come as part of Trump’s “Liberation Day” tariffs, announced on April 2. These duties originally targeted a wide range of goods with steep increases, but most were paused later that month to allow time for negotiations. The temporary rate now sits at 10%, though the administration says that could change depending on the outcome of talks.
Nike’s announcement follows a similar move by Adidas, which raised prices in the U.S. in anticipation of rising import fees. Nike also said it increased retail prices on some shoes and apparel starting in early June.
Despite the added pressure, Nike reported fourth-quarter revenue of $11.1 billion its lowest since 2022 but earnings still beat Wall Street expectations. The company’s stock rose over 10% in extended trading after it projected a smaller drop in revenue than analysts feared.
President Trump, speaking from the White House Thursday, defended the tariff strategy, saying deals with key countries were “going well.” He pointed to an agreement with China on rare earth minerals and hinted that India could be next. But he also signaled he was prepared to impose steep duties if negotiations stall.
“We’re not going to make deals with everybody,” Trump said. “Some, we’ll just send a letter and say, thank you very much. You’re going to pay 25, 35, 45%.”
Commerce Secretary Howard Lutnick later said China agreed to deliver key raw materials used in U.S. manufacturing, including rare earths needed for defense, electronics, and energy technologies. The White House confirmed the two sides reached a “framework” agreement under the Geneva talks, though full details remain unclear.
Trade between the U.S. and China nearly froze earlier this year after a round of retaliatory tariffs in April. While some duties have since been rolled back, the situation remains tense. The White House has not ruled out extending the current tariff pause past the July 9 deadline.
At Thursday’s press briefing, Treasury Secretary Scott Bessent said an extension “depends on how talks go,” while White House spokesperson Karoline Leavitt said the date is “not critical” and that new tariff deals could still be presented.
Nike’s cost warning underscores the broader strain on American importers, who are now forced to rework supply chains and pricing models amid volatile trade rules. Industry analysts note that the added expenses are likely to trickle down to consumers, making imported goods from sneakers to smartphones more expensive in the coming months.
