📉 Nike dropped to 2017 prices under tariff pressure!
Nike $NKEshares plummet by more than 13 %as the US administration announced a dramatic increase in tariffs on imports from Southeast Asia.
Specifically: 46% tariff on Vietnam, 32% on Indonesia, 49% on Cambodia, and another 34% on China, on top of the previously imposed tariffs.

For Nike has Vietnam key importance for Nike, where half of all the brand's footwear is produced, and that is not all. According to its latest annual report, a large part of its apparel also comes from the region. The newly announced tariffs thus strike right at the heart of the company's production chain. But Nike is certainly not the only one, and I think the overall impact of the tariffs will be reflected in the economic indicators.

What to watch out for!
Geopolitics is an active driver of market sentiment.
For many years,Asia' s cheap labor advantage was considered a stable pillar of global manufacturing. Today, this model is being shaken and the risks of dependence on individual markets need to be reassessed.

Multinational brands such as Nike face exponential costs.
High tariffs are reflected in margins. The question is how much of these costs a company will be able to pass on to the customer without weakening demand.

The change in the company's pricing is not just a temporary reaction.

If tariffs become a more permanent instrument of economic policy, it will be a structural change. Analysts, such as Alex Straton z Morgan Stanleypoint out that the market has long underestimated the sensitivity Nike (and other brands) to this type of shock.

🏭 The slump is not just about Nike. Other shoe and apparel companies that have similar geographic distribution of production may also be affected.

Nike is a strong brand with a global reach. But even such a company may find itself on its knees if there is a combination of geopolitical pressure, loss of margins and the need to reorganise supply chains.

What do you think of Nike? Can it hold on despite such big problems?