American consumers will experience higher costs for Asian-made sporting equipment following US President Donald Trump’s recent duties imposed on China and nearby countries, according to predictions from Hong Kong specialists on Friday.
The United States imposed new tariffs on Wednesday that primarily affected China along with multiple Southeast Asian countries deeply engaged in producing goods for major global sporting equipment companies.
Cambodia, Vietnam, China, and Indonesia faced respective tariff increases of 49%, 46%, 34%, and 32% on goods exported to the U.S., impacting brands such as Nike, Adidas, Under Armour, Lululemon, On Holdings, Amer Sports, and Hoka—each having some level of manufacturing presence in these areas.
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According to Nike’s 2024 annual report, Vietnam, Indonesia, and China accounted for 50%, 27%, and 18% of their shoe production in the previous year. In terms of apparel, Vietnam contributed 28% for this US-based firm, followed by China and Cambodia at 16% and 15% respectively.
However, Vera Yuen Wing-han, an economics lecturer from the University of Hong Kong, stated that the effect on prices would adversely affect American consumers.
She mentioned that this tariff has been imposed on numerous countries, thus offering no advantage specifically to Vietnam, China, or Cambodia. However, producing domestically within America turns out to be quite costly; therefore, they still need to bring products in from elsewhere, even at an increased cost.
Yuen additionally mentioned that this trend might impact premium sports brands as customers choose more affordable alternatives.
She mentioned that when you impose high tariffs, the quality declines.
Simon Lee Siu-po, an economist at the Shenzhen Finance Institute affiliated with the Chinese University of Hong Kong, stated that theoretically, consumers would have to "pay higher prices."
He mentioned that consumers might not cover the entire cost, with retailers absorbing part of it. However, this could ultimately lead to narrower profit margins and decreased consumer expenditure.
According to Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, Asian manufacturers might experience some discomfort.
In 2018, when Trump imposed tariffs on China, manufacturers shifted their supply chains away from the nation towards Southeast Asia, with Vietnam being the primary winner of this shift.
"In contrast to 2018, there will be hardly anywhere safe from Trump's tariffs," Ng stated.
Maintaining affordable prices without harming demand presents a major hurdle. Nations like Vietnam will continue to cater to markets outside the US, yet there isn’t an immediate substitute for American consumer spending in the near term.
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The article initially appeared on the South ChinaMorning Post (www.scmp.com), which is the premier source for news coverage of China andAsia.
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