Nike Stock Plunges 13.01% on U.S. Tariff Hike

On April 3, 2025, Nike's stock experienced a significant drop of 13.01% in pre-market trading, reflecting the market's reaction to recent geopolitical developments.

Nike's stock decline is primarily attributed to the U.S. government's imposition of a 46% tariff on Vietnamese goods, which is a major manufacturing base for the company. This tariff, along with similar measures on other Asian countries, has significantly impacted Nike's production costs and supply chain.

Analysts have noted that Nike sources a substantial portion of its footwear production from Vietnam, with factories in the country accounting for 50% of Nike-branded footwear production last year. The tariff increase is expected to have a profound impact on Nike's financial performance in the coming quarters.

In addition to Vietnam, the U.S. has also imposed tariffs on other key manufacturing countries for Nike, including Indonesia with a 32% tariff and China with a 34% tariff. These measures are part of a broader trade strategy aimed at addressing perceived imbalances in global trade.

The tariffs have led to a broader sell-off in the athletic apparel sector, with other major brands like Adidas and Puma also experiencing significant stock declines. The market's reaction underscores the sensitivity of these companies to changes in global trade policies and the potential impact on their bottom lines.