4.13%
1.07%1.36%3.60%1.80%If October 29th 1929 was ‘Black Tuesday’, then 3rd April 2025 was ‘Triple Black Thursday’ for the sneaker, sportswear & sporting goods industry as Trump announced new tariffs for Vietnam & China.
With a “reciprocal tariff” rate of 46% on Vietnam’s imports (topping 35% for Chinese imports), both a heartland of manufacturing for some of the top sneaker brands such as Nike, Under Armour, adidas & new kids on the block like On. Stocks went into a frenzy yesterday as Donald Trump announced the news, highlighting the big sneaker & sportswear brands reliance on the South East Asian region of cheaper manufacturing costs. As someone that’s all about sustainability it could be argued that big brands like Nike have long had this coming. Cashing in on cheaper manufacturing costs to maximise profits. The question is how will it really affect the global sneaker market? One thing is for sure the likes of Nike aren’t suddenly going to shift to 100% US manufacturing. Someone will have to bite the import fees, and it’s more than likely going to be the average consumer, who let’s be honest is already having a tough time.
Some of the biggest losers so far in the industry included Nike (NKE) which was down 15%, Amer Sports (AS) which owns Arc’teryx & Salomon was down 14%, VF Corporation (VF) which owns Vans & The North Face was down by 29%, Under Armour (UA) was down by 18% & On Holding (ONON) was down by 16%. US retailers like Foot Locker (FL) & Dicks Sporting Goods (DKS) were also down as investors digested the news that manufacturing the majority of your products in Vietnam, or China, might not be a plausible business model no more, for US consumers anyway.
Back in November 2024 we reported how US sneaker prices could store under Donald Trump’s proposed import tariffs on goods entering the US, what was more speculation at the time no one really knew how it would actually affect the markets. Vietnam which has a $123.5 billion trade surplus with the US was a prime target for Trump. It also happens to be the country that Nike manufactures 50% of its footwear & 28% of its apparel according to its latest financial year for 2024. At a time when the swoosh is trying to reclaim its former glory, and having issues with discounted inventory, it couldn’t really come at a worse time. Other brands which rely heavily on Vietnam manufacturing includes adidas, Salomon, Arc’teryx & Columbia. There’s also On, one of the fastest growing footwear brands currently on the market, that sourced 90% of its footwear & 60% of apparel from Vietnam for 2024.
If Trump’s calling this Liberation day for tariffs, it’s certainly not liberation day for the sneaker & sportswear industry. Maybe they had become too reliant on cheaper manufacturing costs. The likes of Nike have literally spent decades building up South East Asian manufacturing hubs to capture lower labour costs and government incentives to attract foreign investment. New Balance on the other hand have continued with their premium ‘Made in UK’ & ‘Made in USA’ ranges, the key here is premium and that is also reflected in the cost. They also manufacture in China.
The question now is how is all this going to work for the global sneaker market? If I was looking in from a consultancy point of view right now for a brand at the latest sneaker tariffs, I’d probably be suggesting stick with Vietnam for the UK & European markets. Invest in US manufacturing hubs for US consumers and adsorb as much of the extra manufacturing costs as possible because the “cheap labour” ride for US consumers is over…for now it seems. Also don’t forget to subscribe to Sneaker Jobs & follow @sneaker_jobs to keep up to date with all the latest industry news.
