Trump’s massive 46% Vietnam tariffs pummel Nike, American Eagle, Wayfair

Retailers and brands have turned to Vietnam to manufacture goods from sneakers to couches while moving some or all production out of China, Report informs via CNBC.

For years, China’s southern neighbor became a popular alternative for companies trying to avoid the crossfire of US trade tensions with Beijing. Now, as President Donald Trump expands his trade war worldwide, they can no longer steer clear.

Trump said he will put a 46% duty on imports from Vietnam as part of a new wave of global tariffs announced Wednesday. That could soon raise costs for major corporations in the apparel, furniture and toy space, and some of them may pass those increases to consumers in the form of price hikes. The tariffs on Vietnam take effect on April 9.

China exported more goods to the US than any other country for more than two decades, but Mexico surpassed China as the top source in 2023. China is now the second-largest supplier to the US, accounting for $438.9 billion worth of goods in 2024, according to government data from the Office of the US Trade Representative.

For companies that have looked to diversify the countries they rely on for production and reduce risks from trade conflicts with China, Vietnam has also become a popular place to go. Imports from Vietnam grew to $136.6 billion in 2024, up about 19% from 2023, according to the Office of the US Trade Representative.

Some household names will feel the pinch from Vietnam tariffs. Nike manufacturers about half of its footwear in China and Vietnam, with about 25% coming from Vietnam. Trump will put a 34% tariff on top of existing 20% duties on imports from China, for an apparent rate of 54%, a White House official told CNBC.

The tariffs would be yet another headwind for the sneaker and athletic apparel giant, which already delivered a disappointing forecast for the current quarter.

That guidance, which projects a double-digit percentage sales decline in the three-month period, included the estimated impact from tariffs on imports from China and Mexico.

Expanded tariffs could stall or slow Nike’s efforts to revive its brand and improve sales under its new CEO, Elliott Hill, a company veteran who took the helm last fall.

Nike shares dropped nearly 12% in afternoon trading Thursday. Adidas and other major footwear players also rely heavily on Vietnam.

Adidas said it will evaluate the tariffs and monitor how they will affect its business.

Nearly a third of footwear imports in the US came from Vietnam in 2023, the most recent full-year data available, according to the Footwear Distributors and Retailers of America, an industry trade group.