The supply chain of sports shoes is the point of pain in Trump’s Tariff War

18 shoes displayed at the Nike Store in New York, a $ 150 price tag and language tags woven with the message “made in Vietnam”.

This last facta is a great problem for a turning plan for Elliott Hill launched by Vomero 18 this year to win the Runners to other brands this year. Vietnam has become a global center of sports shoe production, and this week is subject to one of the most punishment tariffs applied by US President Donald Trump.

Trump said that production would want to return to the shores of us. Analysts say higher prices for more effective effect trainers are higher than higher prices, because the United States has no factories to operate shoes and workers working.

Nike in the United States, in 1995, began to produce five contracted shoe factories, one of the five contract footwear, one of the country’s earliest foreign investors and contributes to exports and economic growth. In the coming years, the company quickly expanded its base and has created thousands of businesses involving a cheaper workforce.

Nike Now there are 130 supplier factories that produce shoes, clothing and equipment in Vietnam, and the country is half of its shoe production.

AdidasThe opponent based in Germany receives 39 percent of their shoes from Southeast Asia.

Trump’s new 46 percent tariff, American clothing and foot association, will be placed on the fee for 20 percent percent of the United States.

Manufacturers can open trainer factories in new countries, but can transfer shoe supply chains, for about two years since the Supply Chain Supply Procurement Director Chris Rogers. Companies usually plan such changes in five years.

One Deutsche Bank Analyst was suggested that Mexico, Mexico, Brazil, Turkey and Egypt can be an alternative to Egypt. However, due to the length of order agreements with suppliers, it will take 18-24 months to any decision that result in material changes in the ground.

Also, Trump applied so-called reciprocal At least 10 percent of tariffs in each trade partner. According to a large shoe room like China and Indonesia, new proportions are three times more.

“It will be difficult to find a cheaper market without leaving the planet,” David Marcotte, the consultant’s retail vice president.

Nike did not respond to a request for comment. In the quarterly report on Thursday, the company said, “We” said: “Several external factors that create uncertainty and variability in the operating environment, but not limited, geopolitical dynamics, new tariffs, tax regulation and wavy foreign exchange rates.”

The company was appointed last year Kick After the CEO falls to CEO after the small competitive brands flee from small competitive brands.

His shares were reduced to eight years in this week, because investors feared on the costs of Trump’s new tariffs.

For a shoe brand, “There are three main avenues from a cost reduction in the point of reduction,” said William Dylan Carden at William Blair. “You can push back to get your suppliers (for). You can push the price to consumers and try to charge more. Or you can eat it.”

Cochrane estimated that the price increase in the United States is to increase the price increase in the United States to maintain a total profit of the brand, which is a total profit based in Vietnamese, and the United States. According to him, both companies can be better than Nike for their less sold in the United States.

Metzler Analyst Felix Dennl said that Adidas is “well-placed” for price increase in both lifestyle and performance segments. ”

On the other hand, this, “it is difficult to increase increasing costs,” as efforts to rebrand, could not win a prize so far – one of the reasons substitution Puma Chief Executive Director Arne Freundt Thursday.

In general, sports goods producers “will investigate the range of products in the United States,” he said.

Adidas refused to comment. “Many of many strategies and long-term partners in our supplier base can produce in several different countries,” Puma said.

Vietnam, Trump’s first term in the office, when he started a trade war with Beijing, took a new wave in a new era when they wanted the production of companies away from China. Suppliers to shoe manufacturers in Vietnam are not only local companies, but also there are groups of South Korea and Taiwan.

Vietnam’s migration was the third after the US trade surplus in the Balloon for $ 123.5 billion in the world, China and Mexico. The White House Trade Balance Used Figures calculate “Mutual” tariff rates of each country.

Deutsche Bank Analyst Coxrane can lead to “reduce order volumes and reducing more products in Europe” and reduce more products in Europe.

99% of shoes, in the United States, Carden, Russia residents said that the market could be more like a Soviet Union for Levi’s Jeans for foreign guests.

“We are behind the iron curtain,” he said.

Data analysis by Clara Murray