Former President Donald Trump’s recent trade policies have significantly impacted global apparel brands like Nike, Adidas, and Puma, leading to shifts in their manufacturing strategies, including increased production in India.
Impact of New Tariffs
On April 5, 2025, Trump imposed comprehensive tariffs affecting imports from over 180 countries, with a general duty of 10% and higher rates for nations with substantial trade deficits, including China, Vietnam, and the European Union. This move has caused considerable volatility in the fashion industry, as over 98% of U.S. apparel is imported. Major brands such as Nike and Adidas, which heavily source from countries like Vietnam and China, have seen their market values decline due to these tariffs.
Vietnam’s Tariff Negotiations
Vietnam, a primary supplier for brands like Nike and Adidas, faces a 46% tariff starting April 9 unless a new trade agreement is reached. In response, Trump announced a “productive call” with Vietnam’s leadership, during which Vietnam expressed its intention to reduce tariffs to zero contingent on a free trade agreement with the U.S. This development has positively influenced shares in major apparel companies reliant on Vietnamese manufacturing.
Shift in Manufacturing to India
In light of these trade tensions and tariffs, companies like Nike, Adidas, and Puma are exploring alternative manufacturing hubs, including India. India’s competitive labor costs and growing manufacturing capabilities present attractive options for these brands seeking to diversify their production bases outside traditional centers like China and Vietnam. This shift aims to mitigate risks associated with geopolitical tensions and trade uncertainties.
By BHARAT GLOBAL TIME
