Beijing, China — Nike has announced that U.S. tariffs imposed by President Donald Trump could potentially increase its costs by approximately $1 billion this year. The athletic apparel giant is preparing to pivot away from its reliance on Chinese manufacturing to mitigate the effects of evolving trade policies.

In recent statements, company executives highlighted plans to diversify production locations in response to rising tariffs. Nike plans to increase the prices of certain products, including footwear and clothing, beginning this June. This forecast follows a similar announcement by rival company Adidas, which indicated that it may also raise prices due to tariff-related expenses.

Despite facing headwinds from tariffs, Nike’s shares increased by over 10% during after-hours trading as the company projected a less severe decline in first-quarter revenue than anticipated by analysts. However, the company’s fourth-quarter revenue totaled $11.1 billion, the lowest figure reported since the third quarter of 2022.

Chief Financial Officer Matthew Friend noted that 16% of Nike’s U.S. footwear is currently manufactured in China, a figure projected to be reduced to the “high single-digit percentage range” by the end of May 2026. This shift is a strategic response to the significant tariffs affecting products imported from China.

Tariffs targeting a wide array of imports from various countries were announced by Trump on April 2 as part of a major policy move termed “Liberation Day.” However, later in the month, he paused most tariffs to facilitate negotiations, suggesting intentions to reach “90 deals in 90 days.”

As pressure mounts ahead of the July 9 deadline for tariff suspension, the White House faces increasing scrutiny regarding its future trade negotiations. In remarks made Thursday, Trump asserted that discussions were progressing positively, notably referencing agreements with China and an upcoming negotiation with India.

Yet, the president cautioned that the U.S. would not engage in negotiations with every country, indicating a selective approach. He stated that some nations may simply receive notification of their tariff obligations without further discussion.

Commerce Secretary Howard Lutnick has indicated that the agreement with China is expected to streamline the supply of critical materials, including rare earth minerals, essential for various industries. Previously, access to these materials had fueled fears of escalating trade tensions.

White House spokesperson Karoline Leavitt mentioned that the July 9 deadline is flexible and that the president is prepared to offer countries new tariff agreements. The recent U.S.-China arrangement aims to secure critical supply chains and has been viewed as a necessary step to prevent renewed confrontations.

As a culmination of trade disputes, tariffs introduced by both the U.S. and China nearly resulted in a complete halt of commerce between the two nations. Although some tariffs are set to be reduced, full elimination remains unlikely, as both countries navigate the complexities of international trade.