Nike Warns $1B Cost Increase from Trump Tariffs, Plans China Production Shift

Nike expects President Trump's tariffs to increase its costs by approximately $1 billion in its current fiscal year, prompting the company to announce phased price increases for U.S. consumers and a plan to cut its reliance on Chinese manufacturing from 16% to a high single-digit percentage by the end of fiscal 2026. To mitigate the impact, Nike is diversifying its supply chain, working with suppliers and retail partners, and considering corporate cost reductions. Despite the financial headwinds, Nike reported better-than-expected quarterly earnings, and its shares surged over 10% following a forecast of a smaller revenue drop than analysts had predicted. The company emphasized that, while tariffs pose a significant cost headwind, it aims to fully mitigate their impact over time through sourcing shifts and operational adjustments. Nike’s turnaround plan under new CEO Elliott Hill appears to be stabilizing the business, although the tariff burden is expected to be most acute in the first half of fiscal 2026. Analysts note that since other sportswear brands are also likely to raise prices, Nike may not lose much market share in the U.S.