Nike Shifts Production and Raises Prices to Mitigate $1 Billion Tariff Cost

Nike said Thursday (June 26) that the new U.S. tariffs currently in place will cost the company about $1 billion.

The footwear and apparel company is working to mitigate that gross incremental price increase, Nike President and CEO Elliott Hill said in remarks prepared for delivery Thursday during the firm’s fourth-quarter earnings call.

“[These] tariffs represent a new and meaningful cost headwind, and we are taking actions that balance the consumer, our partners, our Win Now actions, as well as the long-term positioning of our brands in the marketplace,” Hill said.

In response to the tariffs, Nike is reallocating its production across countries, aiming to reduce the percentage of footwear imported to the U.S. from China from the current 16% to the “high single-digit range” within a year, Hill said.

The company is also implementing new partner arrangements with suppliers and retailers to mitigate the cost increase, making a “surgical price increase” that will start rolling out in the U.S. in the fall, and considering corporate cost reductions, Hill said.

“We intend to fully mitigate the impact of these headwinds over time, as we implement and annualize the actions I’ve outlined,” Hill said in his remarks.

The PYMNTS Intelligence report “Tariffs and Business Uncertainty: The Current State of Play” found that 42% of goods firms and 21% of services firms plan to increase prices in response to tariffs.

The Federal Reserve Bank of New York said June 4 that companies in the service and manufacturing sectors are raising prices on tariffed goods. It also reported that businesses adjusted operations by changing sourcing locations and modifying inventory levels and that in many cases, they saw a decrease in their bottom lines.

The PYMNTS Intelligence and Visa Acceptance Solutions report “Consumer Tariff Sentiment” said that the impact of tariffs on consumer sentiment might be the biggest retail trend of 2025.

The report found that nearly half of U.S. shoppers expect tariffs to raise prices at double the current inflation rate and that 44% of consumers have already changed their shopping habits in response to tariff-inducted price pressures.