Nike faces pressure as tariffs threaten jobs and production

In early April 2025, President Trump announced significant tariffs on imports from several countries, including a 46% tariff on Vietnam, a key manufacturing hub for Nike. This announcement was part of a broader strategy to address trade imbalances. For Nike, which has shifted a significant portion of its production out of China over the past decade, 131 factories in Vietnam employing nearly 460,000 workers are most affected. Nike has also reduced its reliance on Chinese factories, now working with only 120, a decrease from over 350,000 workers in 2012. The potential impact of these tariffs on Nike's factory workers is concerning. Workers may be pressured to meet unreasonable production targets as manufacturers face increased costs. Experts like Dara O'Rourke have noted that managers might demand longer hours and higher productivity from workers to mitigate the financial impact of tariffs. In such demanding environments, workers could forego essential breaks for food and hydration, leading to health issues such as urinary tract infections, repetitive strain injuries, and other ailments. As Nike publicly espouses a commitment to ethical manufacturing, the reality in supplier factories raises concerns about the welfare of workers. The Worker Rights Consortium pointed out that several garment factories, including some connected to Nike, failed to pay severance benefits totaling nearly $40 million to thousands of workers who lost their jobs due to the pandemic. This situation highlights the ongoing risks faced by laborers as companies navigate financial pressures in an unstable economic environment. Despite the overwhelming challenges posed by tariffs, industry observers predict that apparel manufacturers will continue to choose low-wage countries for production. However, the shift may increasingly focus on nations that are subject to lower tariffs than Vietnam, Indonesia, and China. The prospect of a 46% tariff on sneakers made in Vietnam could surge prices significantly, pushing a $155 sneaker's cost to about $220. It remains to be seen how Nike will manage these economic pressures, as absorbing tariff costs might be necessary to maintain product prices without alienating consumers.