Nike's Strategic Shift: Cutting China Reliance Amid Tariff Tensions
Nike plans to reduce its dependence on Chinese production to counteract U.S. tariffs, anticipating a smaller decline in revenue than expected. The company aims to lower its Chinese imports to under 10% by May 2026, while evaluating corporate cost reductions and increasing marketing investments focused on sports innovation.
Nike announced plans to lessen its reliance on production in China to alleviate U.S. tariff pressures, projecting a smaller-than-expected revenue drop in the first quarter. The company's shares surged 11% following the news.
U.S. President Trump's tariffs could add approximately $1 billion to Nike's expenses, prompting the sportswear giant to diversify its production strategy. Currently, about 16% of Nike's shoe imports to the U.S. are from China, but the company aims to reduce this to a single-digit percentage by May 2026 to mitigate rising costs.
Nike is exploring corporate cost reductions and has increased prices for some products in response to the tariffs. Despite a 12% decline in fourth-quarter sales, Nike remains focused on product innovation and marketing, with investment in its running category beginning to show positive results under CEO Elliott Hill's strategy.
(With inputs from agencies.)
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