U.S. President Donald Trump announced a new wave of "reciprocal tariffs" on Wednesday (2nd), imposing a 10% tariff on all imported goods, and imposing additional tariffs of up to 50% on goods from some countries, triggering shocks in the global market. As the leading sports brand NIKE uses Vietnam as its main production base, its stock price plummeted 7.31% after the market closed. This has also affected many international consumer brands. The market is worried that tariffs will impact the supply chain and further push up prices.
The Trump administration has decided to impose a 46% tariff on imported goods from Vietnam starting from April 9. This policy will significantly increase manufacturing costs and affect industries such as clothing, furniture, and toys. Market experts pointed out that companies may pass on the cost of tariffs to consumers, causing the price of goods to rise and further promoting inflation.
In the past few years, in order to reduce their dependence on China's supply chain, many brands have moved their production lines to Vietnam, treating it as a key manufacturing base. Among them, the American sporting goods giant NIKE has about half of its footwear manufacturers in China and Vietnam, and Vietnam accounts for about 25%. Therefore, the impact of this tariff is bound to be severe. The stock price fell 7.31% after the market closed on Wednesday.
Many multinational consumer goods stocks also fell sharply after the market closed. Ralph Lauren fell 7.32% after the market closed, and Estée Lauder fell 5.44%. These brands are highly dependent on overseas manufacturing. Once production costs soar, profitability will be directly affected.
According to data from the Office of the United States Trade Representative (USTR), the total value of U.S. imports from Vietnam will reach US$136.6 billion in 2024, an annual increase of approximately 19%. However, as the Trump administration expands the scope of tariffs, there are concerns that companies will have difficulty finding more competitive alternative production locations, and the global supply chain may usher in a new wave of shocks.
