U.S.-Vietnam Trade Deal: A Headache for Sportswear Giants

A newly announced trade agreement between the U.S. and Vietnam has introduced complications for major sportswear brands such as Nike and Adidas, both of which rely on Vietnamese factories for production.

The U.S. will enforce a 20% tariff on many imports from Vietnam, with a hefty 40% tariff on transshipped goods, President Donald Trump revealed. This move could particularly impact products assembled in Vietnam using raw materials from China, a scenario compounded by existing scrutiny on transshipment practices.

Despite Vietnam's role as a leading supplier, the trade pact's implications bring uncertainty and potential disruptions to supply chains. Retailers may reconsider reliance on Vietnam due to these fiscal changes, experts suggest. A Nike spokesperson mentioned ongoing assessments of the deal, while Adidas withheld comments.

(With inputs from agencies.)