American sneakerheads might not get their favorite sneaks anymore. Economist Peter Schiff on Thursday warned that Nike Inc. (NYSE: NKE) will not shift production to the United States even after the newly imposed tariffs. Peter thinks it’s probably due to higher prices and reduced domestic sales for the footwear mogul.
What Really Happened: “Nike won’t build factories in the U.S. to make sneakers. That would add more cost than the 40% tariffs,” Schiff wrote on X. “The result will be fewer sneakers sold in the U.S. at much higher prices.”
When he was questioned about whether the footwear brand might absorb tariff costs while it builds domestic factories, Schiff dismissed the idea. He suggested that the company would redirect products instead. He said, “They will eventually sell more sneakers to consumers in other countries instead, as they buy what Americans can no longer afford.”
Oof. “…the company would instead redirect products: ‘They will eventually sell more sneakers to consumers in other countries instead, as they buy what Americans can no longer afford.’” https://t.co/zUpddWiAOF
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The comments come as Nike shares plummeted 14.44% on Thursday after President Donald Trump announced sweeping reciprocal tariffs affecting the company’s supply chain. Vietnam, where Nike produces over half of its footwear, will see a 46% tariff increase.
Why It Matters? Nike was highlighted by Goldman Sachs as one of numerous retailers with considerable exposure to the new tariffs, which include a 34% rate in China and 32% in Indonesia, both of which are key production locations for the brand.
The broader market is now experiencing significant chaos after the tariff announcement, with Wall Street losing about $2 trillion in market value.
What was hit hard were the consumer discretionary stocks, with Nike’s competitors also suffering equal losses. Lululemon Athletica Inc. (NASDAQ:LULU) fell 9.28%, and Adidas shares declined on its 39% Vietnamese manufacturing exposure.
“They will eventually sell more sneakers to consumers in other countries instead, as they buy what Americans can no longer afford.” pic.twitter.com/wRfRrfhjHH
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Analysts warn that brands will need to change prices, negotiate with vendors, and optimize expenses in order to maintain margins. Wedbush Securities analyst Dan Ives termed the tariffs “worse than the worst-case scenario,” citing concerns about the impact on supply chains and demand from China and Taiwan.
