New york: American athletic footwear and apparel corporation Nike has said it anticipates an additional $1 billion in costs due to tariffs imposed under the US' Trump administration, as the company seeks to shift production away from China.

According to Anadolu Agency, Matthew Friend, Nike's chief financial officer, stated during the company's earnings briefing that these tariffs represent a new and meaningful cost headwind. He noted that with the new tariff rates in place, Nike estimates a gross incremental cost increase of approximately $1 billion. The company intends to fully mitigate the impact of these headwinds over time.

Last year, nearly 60% of all Nike-branded apparel was produced in Vietnam, China, and Cambodia, while Vietnam, Indonesia, and China accounted for 95% of Nike's footwear manufacturing. Friend emphasized that while China remains important to Nike's global source base, the company plans to reduce footwear imports to the US from around 16% to the high-single-digit range by the end of fiscal 2026, sourcing more from other countries.

Friend also mentioned that the company plans to introduce a surgical price increase in the US starting this fall and intends to cut expenses through corporate cost reduction measures. Nike's net income for the fourth quarter plunged 86% to $211 million amid tariff impacts and weaker consumer spending, marking its worst quarterly earnings in over three years, with revenues down 12% to $11.1 billion.