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Why Nike shares are bucking the market trend with a 5% gain on Friday

by admin April 5, 2025
April 5, 2025
Why Nike shares are bucking the market trend with a 5% gain on Friday

Nike shares recovered on Friday after President Donald Trump suggested a possible agreement with Vietnam to reduce recently announced tariffs.

The stock was up around 5% in late-morning trading. The Nike stock has crashed around 20% since the start of the year.

The rebound comes after Nike shares plunged on Thursday, following Trump’s announcement of a 46% tariff on imports from Vietnam.

The new duties are scheduled to take effect next week and have raised concerns for companies with deep manufacturing ties to the Southeast Asian nation.

Nike, which produces roughly 25% of its footwear in Vietnam, was among the most affected.

Trump says negotiations on

The president appeared to ease some of those concerns with a post on his social media platform, Truth Social, saying he had a “very productive call” with To Lam, General Secretary of Vietnam’s ruling Communist Party.

“Just had a very productive call with To Lam, General Secretary of the Communist Party of Vietnam, who told me that Vietnam wants to cut their Tariffs down to ZERO if they are able to make an agreement with the US,” Trump wrote.

“I thanked him on behalf of our Country, and said I look forward to a meeting in the near future,” he added.

Trump’s remarks have opened the door to potential negotiations that could soften the blow of the 46% tariff.

While no formal agreement has been announced, the tone of the communication suggests both sides may be willing to explore a compromise.

Why does this spell good news for Nike?

Nike faces major trouble as President Donald Trump’s new tariff regime threatens to further strain the company’s already challenged outlook.

The sneaker and athletic apparel giant, which manufactures about half of its footwear in China and Vietnam, with roughly 25% coming from Vietnam alone, is also staring down a 34% tariff on Chinese imports atop the existing 20%, bringing the effective rate to 54%.

The company had already factored in tariff-related headwinds in its latest guidance, which projected a double-digit percentage drop in sales for the current quarter.

That forecast included the impact of levies on goods from China and Mexico.

The expanded duties come at a fragile moment for Nike, which is attempting to stabilize its brand and reignite sales momentum under new CEO Elliott Hill, who stepped into the role last fall.

Hill, a long-time company executive, is now facing intensified cost pressures just as he tries to steer the company through a turnaround.

A possible negotiation with Vietnam could help relieve some pressure from the global shoe giant.

The post Why Nike shares are bucking the market trend with a 5% gain on Friday appeared first on Invezz

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