Nike and Adidas Should Be Safe From Tariff Hikes Should Trump Just Do It — Panjiva
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Nike and Adidas Should Be Safe From Tariff Hikes Should Trump Just Do It

China 1760 Cons. Discr. - Apparel 214 U.S. 3301 Vietnam 155

Sportswear maker Nike has reported better-than-expected earnings, S&P Global Market Intelligence reports, but has maintained full year guidance (implicitly cutting rest-of-year). Foreign exchange “headwinds” caused by the widening tariff war between the U.S. and China is cited as a major reason for the change. So far the direct impact on duties should be minimal as most apparel lines have yet to face tariffs, as outlined in Panjiva research of 9/24.

Furthermore Nike’s reliance on China, like it’s peers, has declined over time as apparel and footwear manufacturing has headed overseas. Panjiva data shows that China accounted for 38.0% of U.S. apparel and footwear imports in the 12 months to July 31 vs. 46.0% in 2012 while exports from Vietnam reached 16.5% in the past 12 months from 9.3% in 2012.

MADE IN VIETNAM AN INCREASINGLY COMMON LABEL FOR CLOTHES AND SHOES

Chart segments U.S. imports of apparel and footwear by origin on a monthly (dotted) and annual average (solid) basis.   Source: Panjiva

Additionally Nike has a similar sourcing structure to its competitors including Adidas and Under Armour with 16% of seaborne shipments from China (10% for Adidas and 11% for UA) and 22% from Vietnam (44% Adidas, 24% for UA) . That reduces the competitive advantage the firms face relative to each other from a cost perspective. Skechers may be at a competitive disadvantage with 30% of its imports having come from China.

SIMILAR SOURCING STRATEGIES, EXCEPT FOR SKECHERS

Chart segments U.S. seaborne imports by consignees associated with Adidas, Nike, Skechers and Under Armour in the past 12 months, denominated in TEUs. Source: Panjiva

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