Nike's Strategic Shift: Moving Production Beyond China Amid Tariff Strains

Nike plans to reduce its dependence on Chinese production to counter the impact of U.S. tariffs. The sportswear giant anticipates a minor first-quarter revenue decline, outperforming expectations. By May 2026, Nike aims to decrease imports from China while focusing on product innovation and marketing strategies to grow its running category.

Nike is set to reduce its reliance on production in China as a strategic move to minimize the impact of U.S. tariffs on imports. This announcement saw Nike shares surge by 11% in extended trading, despite the potential $1 billion tariff setback outlined by the company's executives.

Currently, 16% of Nike's shoe imports to the U.S. come from China, but Chief Financial Officer Matthew Friend revealed plans to reduce this to a 'high single-digit percentage range' by May 2026 by shifting production elsewhere. The company is also reviewing corporate cost reductions and has raised some U.S. product prices to combat tariff impacts.

Nike CEO Elliott Hill's strategy to enhance product offerings and marketing around sports has revived the running category. With increased investment in running shoes like Pegasus and Vomero, Nike anticipates these innovations will balance declines in traditional sneakers. Despite China's economic challenges, Nike's financial metrics surpassed expectations with a fourth-quarter revenue drop less severe than forecasted.

(With inputs from agencies.)