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Epic Economist, 4/8/25
"Nike And Other Major Retailers Are In
Deep Deep Trouble And You’re Paying For It"
"Imagine it’s back-to-school season in America. You head into Walmart to grab a pair of sneakers for your kid. Maybe some Nikes or Adidas. But when you check the price tag, you freeze. That $80 pair now costs $115. What happened? In one word: tariffs. Specifically, Donald Trump’s new trade war - an aggressive tariff strategy hitting imports from dozens of countries. The headlines focus on China, but the real shock? A nearly 35% tariff on footwear from Indonesia, and up to 49% on shoes from Vietnam - where most of your favorite brands actually make their products. But this story goes way deeper than sneaker prices. It’s about unraveling the global economy, igniting trade wars, punishing working-class Americans - all while promising to make America “great” again. So who’s actually winning here? And who’s left paying the price? Let’s break it down.
First - What is a tariff? And who really pays it? A tariff is a tax. A fee that the U.S. government charges when goods enter the country. But the foreign government doesn’t pay it. American companies do. Let’s say Nike makes shoes in Indonesia. When those shoes arrive at the Port of Los Angeles, Nike now has to pay up to 35% of their declared value in tariffs to U.S. Customs. That money goes to the U.S. Treasury. And what does Nike do with that cost? They pass it on to you. Through retail markups. Through higher prices. You pay the tariff - not China, not Indonesia, not Vietnam. You. It’s a clever way to impose taxes without calling them taxes. Tariffs can sometimes protect local industries. But they can also become a tool of political performance - especially during election cycles.
The origins: how we got here This shift didn’t happen overnight. For decades, the U.S. promoted free trade as the engine of global economic growth. The logic was simple: let every country specialize in what it does best, lower the cost of goods, and everyone wins. This created an intricate web of global supply chains - where a sneaker designed in Oregon might be assembled in Vietnam, using rubber from Malaysia, cotton from India, and dyes from China. It worked. Sort of. Prices dropped. Corporate profits soared. China became the workshop of the world. And countries like Vietnam and Indonesia rapidly developed. But American factories closed. Union jobs vanished. And millions of workers were left behind. That economic pain, particularly in the Rust Belt, laid the foundation for Trump’s “America First” agenda.
The reality behind your sneakers: Over 97% of shoes and clothes sold in America are imported. Most from countries with low labor costs and established manufacturing hubs: Vietnam, Indonesia, Bangladesh. Nike alone produces about 50% of its shoes in Vietnam, and a massive share in Indonesia. Adidas, Puma, and countless other brands follow the same pattern. So when Trump’s tariffs hit, it wasn’t just a strike against foreign countries - it was a gut-punch to the entire U.S. retail sector. A running shoe that cost $150 might now cost $220. A $26 kid’s shoe could hit $40+. These aren’t hypotheticals. These are forecasts by the Footwear Distributors and Retailers of America.
Who feels it the most? Working-class families. Parents. Students. Seniors on fixed incomes. It’s a silent tax - baked into the price tag. Most Americans won’t even realize why things are suddenly more expensive. Trump’s “reciprocal tariffs” - what they really mean On April 3rd, Trump unveiled a massive tariff package targeting 90+ nations. He called them “reciprocal tariffs” - meaning if a country imposes a 30% duty on American goods, the U.S. will now do the same to them. Sounds fair, right? But trade isn’t a zero-sum game. Many of these countries are developing nations who offer cheap labor - that’s why U.S. companies manufacture there in the first place.
Here are the new tariffs: Vietnam: 46% on footwear Cambodia: 49% Bangladesh: 37% Indonesia: ~35% These countries were once seen as alternatives to China. When Trump’s first trade war with Beijing erupted, manufacturers diversified. They spread their risk. Now, they’re being punished again. The fallout? The stock market reacted instantly: Nike: -10% Adidas: -11% Walmart, Amazon, Target: all down 5–10% Investors knew what it meant - rising prices, shrinking margins, and falling demand. Who are the winners here? Trump says: American workers. He wants to bring jobs back home. Rebuild factories. Revitalize the Rust Belt. But here’s the uncomfortable truth: America doesn’t have the infrastructure to make shoes or clothes at scale. The supply chains are global. The raw materials aren’t here. And even if we built those factories? They’d be automated. Fewer jobs, more machines."
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