“Currently, China represents roughly 16% of the footwear we import into the United States, and we expect this to reduce to the high single-digit range by the end of fiscal '26 with supply from China reallocated to other countries around the world.”

In context

“ctory partners, and our leadership team is experienced in managing through disruption. NIKE has consistently been a top payer of U.S. duties, with an average duty rate on footwear imported into the United States in the mid-teens range. Therefore, these tariffs represent a new and meaningful cost headwind, and we are taking actions that balance the consumer, our partners, our Win Now actions as well as the long-term positioning of our brands in the marketplace. First, we will optimize our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States. Despite the current elevated tariffs for Chinese products imported into the United States, manufacturing capacity and capability in China remains important to our global source base. Currently, China represents roughly 16% of the footwear we import into the United States, and we expect this to reduce to the high single-digit range by the end of fiscal '26 with supply from China reallocated to other countries around the world. Second, we are partnering with our suppliers and our retail partners to mitigate this structural cost increase in order to minimize the overall impact to the consumer. These partner arrangements will come into effect at different times throughout fiscal '26. Third, as part of our regular approach to seasonal planning, we have implemented a surgical price increase in the United States with phased implementation beginning in fall '25. And last, we will evaluate corporate cost reduction as appropriate. However, our highest priority right now continues to be reigniting brand momentum through sport and stabilizing our business. With the new tariff rates in place today, we estimate a gross incremental cost increase to NIKE of approximately $1 billion. We intend to fully mitigate the impact of t”