How Nike Will Navigate a $1 Billion Tariff Impact

Nike is bracing for impact from costly tariffs. The company expects a gross incremental cost increase of about $1 billion with the new tariffs in place as of June 26. 

Matthew Friend, Nike’s executive VP and CFO, outlined the company’s mitigation plan during a recent call with investors following its fiscal 2025 Q4 earnings release. 

Nike will begin by optimizing its sourcing mix and allocating production differently across countries to alleviate cost impact in the United States. As China represents about 16% of the footwear Nike imports in the U.S., the overseas supply chain operations are an important part of its global sourcing base, said Friend. As a result, Nike looks to reduce this to the high single-digit range by the end of fiscal year 2026, reallocating supply to other countries.

Also: Nike Sports research lab uses AI and 4D motion capture to expedite product innovation 

Nike also plans to work with suppliers and retail partners into 2026 to help soften the blow of structural cost increases that could affect consumers. However, a targeted price increase is planned in the U.S., with a phased rollout beginning this fall as part of the brand’s seasonal planning.

Friend added that Nike will evaluate its corporate cost reduction as appropriate, but emphasized that the company’s highest priority is reigniting brand momentum through sport and stabilizing its business.