Nike stock is plunging on Thursday, the day after President Donald Trump announced reciprocal tariffs that will end the nation’s decades-long free trade policy.
“NKE was last seen 11.3% lower at $57.62, as investors digest the long-term impact of rising supply chain costs on the company’s margins,” Schaeffer’s Investment Research reports. “The stock is set to snap a three-day win streak, extending its late-March post-earnings bear gap and hitting its lowest level since November 2017. Nike stock now carries a 23.5% year-to-date deficit.”
On Wednesday evening, Trump announced reciprocal tariffs — adding a 34 percent tariff on China, a 46 percent tariff on Vietnam, a 49 percent tariff on Cambodia, a 32 percent tariff on Indonesia, and a 36 percent tariff on Thailand, among a long list of others.
Reuters reports:
Shares in Nike, Adidas, and Puma dropped sharply after Vietnam was targeted with a 46% tariff rate, Cambodia with 49%, Bangladesh with 37% and Indonesia with 32%, while Trump hiked tariffs on China by an extra 34 percentage points, following the earlier 20% tariffs. [Emphasis added]
“Companies that worked hard over the years to reduce reliance on China by leaning into countries like Vietnam just learned there really isn’t a place to hide,” BMO Capital Markets analyst Simeon Siegel said. [Emphasis added]
The reciprocal tariffs are particularly bad news for massive low-wage outsourcers like Nike, which operates 117 factories in China with nearly 108,000 Chinese workers and 130 factories in Vietnam with almost 460,000 Vietnamese workers.
Likewise, Nike operates 24 factories in Cambodia with more than 57,000 Cambodian workers, 24 factories in Thailand with nearly 21,000 Thai workers, and 45 factories in Indonesia with close to 300,000 Indonesian workers.
In China, the average yearly salary is $10,000, and in Vietnam, the average salary is about $7,200. Similarly, in Indonesia, the average salary is less than $9,500, and in Cambodia, the average salary is about $10,800.
Meanwhile, in the United States — where Nike has just five percent of its total factories and employs less than 1 percent of its entire workforce — the average salary is about $67,000.
John Binder is a reporter for Breitbart News. Email him at jbinder@breitbart.com. Follow him on Twitter here.
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