Golf’s back in season, so of course I had to use it as an analogy as soon as I got the chance. But bear with me, it will make sense eventually. You ever play golf with that guy? The one who takes a mulligan on every single hole… hooks one into the lake, drops another ball, shanks that one into a bunker, then asks, “You okay if I hit another one?”

Well that’s pretty much the sneaker industry right now. Nike, Adidas, Skechers (the whole gang) just yanked their tee shot into the woods and are now pleading with President Trump for a mulligan. That’s because they’re staring down the barrel of a nightmare 220% tariff bill. And like that weekend duffer who insists he’s “figuring it out,” they’re hoping for a do-over before the scorecard gets ugly.

Here’s the lowdown… the Footwear Distributors and Retailers of America (FDRA) sent a letter to the White House pleading for shoes to be exempt from Trump’s “reciprocal tariffs.” Inside the letter, they said the tariffs pose an “existential threat” to their industry and warned that, without immediate relief, inventories will dry up, costs will explode, and brands will either fold or jack up prices.

And they’re not wrong to panic. Trump’s tariffs, announced April 2nd, stickered imports from China, Vietnam, and Cambodia with rates that make my Visa credit card APR look generous. Vietnam and Cambodia got a 90-day grace period with a 10% rate. But Chinese imports are looking at a 145% effective tariff. That’s far worse than a tax… that's legit mugging.

Even worse, these new tariffs stack on top of the existing duties the industry was already struggling with. For context, some children’s shoes are already subject to tariffs near 38%. If the new rates are layered on top, companies serving (lower and middle class) families could be looking at more than double their current costs… something that can’t realistically be passed on to consumers buying $30–$50 sneakers.

And for anyone thinking, “Maybe this’ll bring shoe factories back to the good ole U.S. of A,” the FDRA poured cold water all over that dream. They say the tariffs kill the stability companies need to even think about shifting production. Plus, the machines needed to build shoes here are also getting hit with tariffs.

So how’s this playing out in the markets? Not great. Even after the recent rally, Adidas stock is down around 3% so far this year, and Nike is trailing even harder… down roughly 20% year to date. To their credit Adidas has shown recent financial improvements, including a notable revenue increase in Q4 2024, but most analysts still have them at a sell rating. 

All this to say, if the tariffs go into full effect, companies won’t be the only ones feeling the squeeze. You and I could soon be paying $300 for a pair of Nike running shoes… or worse, settling for knock offs from Walmart, simply because prices have become too high.

Stocks.News has positions in Nike and Skechers.