Why Nike Stock Was Sliding Today
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A new announcement of tariffs on imports from countries like Cambodia and Indonesia weighed on Nike stock.
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Those two countries are major manufacturing hubs for the footwear giant.
Shares of Nike (NYSE: NKE) were moving lower today, seemingly in response to President Trump’s decision yesterday to reinstitute the reciprocal tariffs he had originally issued in April on several Asian countries as of Aug. 1.
Nike, which imports much of its product from Asia, with Vietnam and China being its two biggest manufacturing markets, was seen as a potential loser on the news, even though those two countries weren’t included in the announcement.
As of 2:20 p.m. ET., Nike stock was down 3.2%.
For most countries mentioned, tariffs were the same as was originally announced back in April.
Japan and South Korea, which both received a 25% tariff rate, got the most attention, as those are the two biggest import markets of the group, but Cambodia and Indonesia seem to have the biggest implication for Nike.
As of fiscal 2024, which ended in May 2024, Nike imported 27% of its Nike brand footwear from Indonesia and 15% from Cambodia.
The 32% duty on Indonesia was identical to the one announced in April, while Cambodia’s was lowered from 49% to 36%.
Both were higher than Vietnam’s at 20%. That was seen as a victory for Nike, as it was lower than the 46% announced back in April. Vietnam is its biggest manufacturing market.
Investors seem to be taking the news in stride overall, as opposed to the “Liberation Day” tariff announcement back in April, when stocks crashed. Nike said in its recent quarterly earnings report that it expected tariffs to add $1 billion in costs this year, and it’s unclear how this news will affect that.
It does show that President Trump is serious about tariffs despite the 90-day pause, and Nike investors shouldn’t ignore the headwinds around the trade war going forward. This won’t be the last time we hear about it.
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