The global footwear and apparel industry is reeling from significant supply chain disruptions following the United States’ imposition of steep new tariffs on key manufacturing nations. Under the leadership of President Donald Trump, the U.S. has announced a 46% reciprocal tariff on goods from Vietnam, alongside tariffs of 49% on Cambodia, 34% on China, and 32% on Indonesia.
This aggressive escalation in the ongoing trade war has sent shockwaves through global markets and deeply impacted industry giants. Vietnam, a major manufacturing hub, is at the center of the disruption. Nearly 50% of Nike’s global footwear and 39% of Adidas’ shoes are produced in Vietnam, with both companies collectively generating over $20 billion in annual revenue from this base.
The market responded swiftly to the news. Nike’s shares plunged 6.4% in after-hours trading, while Lululemon saw a 9.6% drop. Other apparel companies with significant supply chain exposure to Southeast Asia also suffered: Abercrombie & Fitch fell by 7.7%, and Gap Inc., which relies heavily on production in Vietnam and Indonesia, saw its stock tumble by 11%.
These tariffs pose serious challenges for global retailers, increasing production costs, disrupting logistics, and forcing companies to reconsider their manufacturing strategies. The long-term impact could reshape global sourcing and lead to increased prices for consumers worldwide, as brands scramble to adapt to the new trade environment.
