The world faces significant disruption after President Trump's newly announced tariffs on almost all countries. The new tariffs, if they stay in place, will also affect the football market, with Asian countries particularly hit by high tariffs.
Fortunately for Nike, the production costs for a soccer jersey are low - import duties are only levied on the import price
Goods from Vietnam, Indonesia, and China face some of the highest import taxes in the US, ranging from 32% to 54%. Nike's shares dropped 14% the day after the tariff announcement, as concerns grew regarding the potential impact on the company's supply chain.
How the USA's New Tariffs Could Affect Football Kit Prices in the USA
Vietnam has emerged as a key manufacturing center in recent years, with many companies having shifted production there from China during the previous round of tariffs in 2018. Vietnam manufactures 50% of Nike's footwear and a substantial portion of Adidas products, so the new 46% import duty could dramatically impact production costs and retail prices.
For football fans in the United States, this could translate to significant increases in the retail prices of both replica and authentic kits. Luckily for brands, a football kit is cheap to produce (we assume 10-15 USD - it might be a bit lower in reality), meaning that the total amount of tariffs is not as high as the final retail price of 95-170 USD suggests.
We could see price increases for a soccer jersey of around 5 to 15 USD
It is unclear how brands will react to the tariffs once they are active. It does not affect products that are already in the USA, so the current stock does not need to be increased in price. If Nike passes through 100% of the extra tariffs, we see price increases for a soccer jersey of around 5 to 15 USD.
For Nike and other brands, relocating part of the production to the USA makes no sense, as the significantly higher salaries in the USA would render any products made there much more expensive than the additional tariffs would. Ultimately, at least for the football market in the United States, the tariffs will simply serve as a tax increase but will certainly not bring any jobs back to the USA.
For football supporters from the USA, these developments could mean paying more for their favorite club and national team kits in the coming seasons.
Nike employs nearly 460,000 workers (39% of Nike's global workforce) in Vietnam. This contrasts dramatically with Nike's US operations, which include just about 4,100 workers. 1% of those in Vietnam.
Do you think Adidas and Nike will increase prices in the USA soon? Let us know in the comments below.