Nike China manufacturing has announced plans to significantly reduce its China-based manufacturing footprint by 2026 as sweeping tariffs imposed by President Donald Trump threaten to inflate the company’s costs by as much as $1 billion this year alone.

The move comes as part of Nike’s broader strategy to realign its global supply chain, limit exposure to punitive trade policies, and protect profit margins amid rising operational uncertainty.

Trump Tariffs Force Supply Chain Shift

In April, President Trump unveiled his so-called “Liberation Day tariffs,” imposing duties as high as 46% on goods from Vietnam and 32% on products from Indonesia. Although those rates were temporarily paused for negotiation, the impact was immediate and severe.

Chief Financial Officer Matthew Friend told investors the firm would move production away from China, where tariffs remain among the highest. Currently, 16% of Nike shoes sold in the US are made in China. That number is projected to fall to “a high single-digit percentage” by May 2026 Nike China manufacturing.

“We’re actively shifting production to mitigate risks from US trade policy,” Friend said, emphasizing the company’s aim to avoid supply bottlenecks and ensure affordability for American consumers Nike China manufacturing.

Price Hikes and Supply Chain Adjustments

Nike China manufacturing has already raised prices on select shoes and apparel in the US starting in June—a move that mirrors similar action by Adidas and other global brands. The goal is to offset costs from new duties while maintaining earnings stability.

Nike China manufacturing Though painful, these steps may be necessary. Trump’s tariff strategy, revived during his second term, has targeted US imports from numerous countries, putting pressure on corporations to either pass costs on to consumers or rapidly restructure sourcing networks.

“The tariffs could become the most significant cost event we’ve faced in a decade,” said one Nike insider, who noted that ongoing talks with Vietnamese and Indonesian suppliers had become “tense” but “constructive.”

China-US Trade Deal Offers Rare Earth Lifeline

In a potentially easing development, Washington and Beijing reached a new deal earlier this month involving rare earth metals. The agreement includes increased shipments of critical materials from China to the US, in exchange for a relaxation of export restrictions.

At a White House press briefing Nike China manufacturing, President Trump said he had “signed” a trade deal with China focused on implementing the Geneva framework. While light on details, a White House official later confirmed that it includes a roadmap for rare earth supply security—critical for electronics, electric vehicles, and even Nike’s wearable tech sector.

Wall Street Reacts Positively

Despite the turmoil, Nike shares surged by more than 10% in after-hours trading following its quarterly earnings release. The company posted fourth-quarter revenue of $11.1 billion—its lowest since Q3 of 2022, but still better than analysts’ expectations.

Investors were reassured by Nike’s proactive steps to rebalance production and minimize exposure to China-centric risk. CFO Friend reiterated confidence in the brand’s agility to “navigate the trade landscape with speed and resilience.”

90 Days to Make a Deal?

The broader trade landscape remains uncertain. Trump’s 90-day pause on full implementation of tariffs is set to expire on 9 July, raising concerns that a new wave of duties could be re-imposed.

Trump was non-committal when asked about the deadline. “We’re not going to make deals with everybody,” he said. “Some we’ll send a letter: ‘Thank you. You’re paying 25, 35, 45%.’”

Still, White House spokesperson Karoline Leavitt suggested that the deadline was “not critical,” and the president is prepared to present partner nations with tariff “deals” based on progress made in bilateral talks.

Looking Ahead

For Nike and other multinational manufacturers, the coming weeks are pivotal. With rising costs, complex geopolitics, and shifting consumer behavior, agility will be key to survival. Nike’s decision to trim reliance on Chinese factories signals the beginning of a global manufacturing reconfiguration that could redefine supply chains across the industry.

Related Stories:

• UK-US Slash Auto Tariffs in New Trade Pact
• Trump’s Global Tariff Strategy Explained
• BBC: Nike pledges to cut reliance on China

Image Credit: EPA – A woman walks past a Nike store in Beijing, April 2025