Why the tariff announcements hit Nike so hard yesterday, in one chart
Nike doubled down on Vietnam for its manufacturing — a 46% tariff could be disastrous for its supply chain there.
Though many stocks got caught up in yesterday’s tariff-induced sell-off, Nike investors had a particularly painful day.
Shares in the Swoosh company dropped 13%, erasing more than $12 billion in market value, more than many of its rivals that were also caught up in the wider retail rout.
Why was Nike dinged so much? This chart, recreated from the great work of Lev Akabas, reveals why:
Over the last two decades, the sneaker company has become increasingly reliant on its Southeast Asian manufacturing partners. Indeed, Vietnam, China, and Indonesia are responsible for 95% of Nike’s footwear manufacturing. All three of them were hit with 30% tariffs or higher on Wednesday.
Vietnam in particular, which is responsible for half of the sports brand’s footwear and more than a quarter of its apparel, is one of the countries hit hardest by President Trump’s new levies, with a 46% tariff rate. The nation no longer looks like the port in the storm Nike had hoped, having concentrated on shifting production efforts there in the last 10 years to reduce its exposure to China.
The industry giant has already been struggling to get rid of the inventory pile that’s plagued it since 2022, with aggressive discounts chipping away at its margins.
