New york: American athletic footwear and apparel corporation Nike has said it anticipates an additional USD1 billion in costs due to tariffs imposed under the US' Trump administration, as the company seeks to shift production away from China.

According to Philippines News Agency, Nike's Chief Financial Officer, Matthew Friend, stated during the company's earnings briefing that these tariffs represent a significant cost challenge. "With the new tariff rates in place today, we estimate a gross incremental cost increase to Nike of approximately USD1 billion. We intend to fully mitigate the impact of these headwinds over time," Friend said.

Last year, nearly 60 percent of all Nike-branded apparel was produced in Vietnam, China, and Cambodia, while Vietnam, Indonesia, and China accounted for 95 percent of Nike's footwear manufacturing. Despite China's importance to Nike's global sourcing, the company plans to reduce footwear imports to the US from around 16 percent to the 'high-single-digit range by the end of fiscal 2026,' instead sourcing more from other countries.

Friend also mentioned that the company plans to introduce a 'surgical price increase' in the US starting this fall and intends to cut expenses through 'corporate cost reduction' measures. Nike's net income for the fourth quarter dropped 86 percent to USD211 million amid tariff impacts and weaker consumer spending, marking its worst quarterly earnings in more than three years with revenues down 12 percent to USD11.1 billion.