In 2015, President Barack Obama delivered a speech at Nike’s headquarters in Oregon, advocating for a progressive trade deal with Asian countries. However, President Donald Trump later canceled the Trans-Pacific Partnership deal. With Trump imposing tariffs, Nike is once again at the forefront of globalization discussions, given its extensive supply chain and reliance on overseas manufacturing.

Nike collaborates with 532 contract manufacturers, with Vietnam being a key production hub where nearly half of its sneakers are made. Indonesia is another significant manufacturing base, while production in China has decreased over the years. Trump’s tariffs, announced in April, had a significant impact on Nike’s stock value, prompting concerns about potential profit losses.

As tariffs squeeze Nike’s supply chain, there are worries about the repercussions on factory workers. Experts suggest that the company may seek discounts from suppliers, potentially leading to increased pressure on workers to meet higher production targets. This could result in adverse health effects and labor violations among factory workers, as seen in past instances during the COVID-19 pandemic.

The possibility of moving manufacturing back to the U.S. seems unlikely due to the complex production systems and equipment involved, coupled with the labor-intensive nature of footwear and apparel manufacturing. Instead, industry analysts anticipate a shift in manufacturing to countries with lower tariff rates. This could have negative implications for workers in countries like Vietnam and Indonesia, leading to job losses and lower wages.

As the situation unfolds, the impact on Nike’s prices remains uncertain. Estimates suggest that if tariffs are fully implemented, prices of Nike products could increase significantly unless the company absorbs some of the additional costs to avoid steep price hikes. Nike’s response to the tariffs and their potential effects on factory workers will be closely monitored in the coming months.