Trump’s Planned Increased Tariffs is Impacting Two Major Oregon Sportswear Companies
Donald Trump’s plan to increase tariffs by more than 60% on goods imported from China is already impacting two of Oregon’s major sportswear corporations, Nike and Columbia, the North American headquarters of Adidas.
The incumbent president’s plan to raise import tariffs has massive ramifications for footwear and apparel companies that rely on China’s affordable manufacturing costs.
In the aftermath of Trump’s election, Nike shares dropped by 3% yesterday as Wall Street anticipated how the new president’s economic policy will impact industry.
It Will be Difficult to Keep Consumer Goods Affordable
‘It is going to be very, very difficult to keep consumer goods affordable for Americans,’ warns Columbia Sportswear CEO Tim Boyle.
Boyle predicts price increases on footwear and apparel if Trump’s plan to place punitive increases on goods imported from other countries is implemented.
He says Columbia started buying goods yesterday (Wednesday) for delivery next fall and that if an import surcharge is imposed, ‘we’ll just raise prices.’
Nike has been moving production out of China. Five years ago, the company manufactured 27% of its apparel in China. That figure has dropped to 16%. During the same period, Nike’s footwear manufactured in China has been reduced from 23% to 18%.
New Tariff Proposals Will Fuel Inflation
But it’s not only businesses that will suffer. Consumers too will bear the brunt of the increased import costs with predictions by the Institute for International Economics that it will cost households up to $3,000 more annually.
Economists have warned that the new tariff proposals will fuel inflation and harm the U.S. economy.
During Trump’s previous presidency in 2019, the cost of increased tariffs for imported shoes was passed onto consumers who ended up paying about $4 billion more, says the CEO of the Footwear Distributors and Retailers of America, Matt Priest. He said the increases had cost U.S. companies an additional $1 billion.
Priest says there must be a better way to handle the situation because ‘adding costs to consumers’ does not help inflation.
Columbia Sportswear, whose flagship retail store is in downtown Portland, employs 8,900 people and distributes its products to 13,000 retailers in more than 72 countries. Last year, Nike employed 11,400 people at its Beaverton headquarters, but this figure has shrunk following layoffs.
The question now is whether Oregon companies can take the necessary steps to weather the storm of new tariffs in Trump’s new administration.