Sports shoes’ supply chain is pain point in Trump’s tariff war

The shoe displayed on a store in New York has thick sols on the shoe, a $ 150 price tag and tongue labels with “made in Vietnam” message.

This last event is a major problem for Nike plan for Turn Arond under Chief Executive Eliot Hill, who launched Bhomiro 18 this year to win behind the runners who switched to other brands. Vietnam Athletic Shoe has become a global center of production – and this week is subject to our most punished tariff imposed by US President Donald Trump.

Trump says he wants to bring back production off the coast. Analysts say that the trainers will have a greater impact, as there is a lack of factories with special tools to inform the ongoing shoes and workers in the United States.

The US -based Nike started producing five agreements in Vietnam through footwear factories, became one of the oldest foreign investors in the country and contributed to its export and economic growth. The company has expanded the base of its supplier in later years and has created thousands of jobs attracted by cheap labor force.

Nike Now there are 130 supplier-factory producing shoes, clothing and equipment in Vietnam and the country is in half of its footwear production.

AdidasIts German-based rival, has received 39 percent of its shoes from the Southeast Asian countries.

According to the American Apparel and Footwear Association, Trump’s new 46 percent tariff will already lay at the top of the 20 percent tariff given to the US import of athletic shoes in the United States.

Manufacturers can open training factories in new countries, but it usually takes about two years to transfer the chains of footwear supply, Chris Rogers, head of the S&P Global Market Intelligence Supply Chain Research. Companies usually plan these national changes in the five -year cycle.

Deutsche Bank analyst Adam Kochran suggested that Mexico, Brazil, Türkiye and Egypt could be alternatives to Vietnam’s manufacturing centers. However, due to the length of the order agreement with the suppliers, a decision will take 18 to 24 months to make clear changes to the ground.

As well, Trump has pressed the so -called Mutual Virtually each trading partner at a minimum rate of 10 percent tariff. For large footwear centers like China and Indonesia, new rates are higher than triple.

“Looking for a cheap market without leaving the planet, the consultant Kantar’s retail senior vice-president David Marot says.

Nike did not respond to any request for the comment. The agency said in a quarterly report filed on Thursday: “We are navigating through several external reasons that create uncertainty and instability in the operating environment, not limited to geographical political dynamics, new tariffs, tax control and fluctuations.”

The company employed last year Hill After falling into sales as CEOs, on the shoe market of small competitive brands such as onn and hooca occupy the market shares of the market.

Its shares have dropped to the lowest of about eight years this week as investors were scared at Trump’s new tariff.

William Blair’s analyst Dylan Carden said, “For a footwear brand,” you have found three primary ways here from the spending sight. “” You can press behind to get your suppliers [to] You charge less. You can try to press the price on consumers and charge more. Or you can eat it. ”

Kochran assumed that another German -based brand, with extensive production activities in Vietnam, Adidas and Puma, should increase the price of about 20 percent in the United States to maintain total profit margins after tariff, although the price may increase to reduce market shares and operating profits. He said both companies could be better than Nike, as they sell less in the US, he said.

Metzler Bank’s analyst Felix Denol said that Adidas was “in good position” to increase prices due to the speed of broad-based brand in both lifestyle and performance.

Puma, on the other hand, will see “passing the extended expenditures significantly more tight”, because the premium shoe maker has failed to achieve speed so far – one of the reasons for this Replacement Puma Arn Thursday.

Overall, sports product makers “will verify their product range in the United States”, Denol said the less profitable products are in phases.

Adidas refused to comment. Puma said it “had a multi-cantry-of-argin technique and could produce many of the long-term partners of our suppliers in different countries”.

Vietnam received a new wave of investment in the office in the first term of Trump, when he launched a trade war with Beijing that organizations induced to remove production from China. Footwear makers suppliers in Vietnam not only local companies, but also South Korea and Taiwanese groups work there.

Migration in Vietnam reached $ 123.5 billion in its trade surplus balloon in the United States last year, the third largest after China and Mexico. The White House uses trade balances in trade Calculation The “mutual” tariff rate of each country.

Deutsche Bank Analyst Kochran says that the instructor brands “order to reduce the order volume and to rebuild more products in Europe, Middle East and China”, which can increase competition in those regions.

In the United States, where 5 percent of the footwear was imported, Carden said the market could become like the Soviet Union, when Russian residents provided a handsome premium for foreign visitors to Levi jeans.

“We are behind the iron screen,” he said.

Data analysis by Clara Mare