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The global footwear and apparel industry is reassessing its manufacturing strategy as Chinese factories offer highly competitive pricing, potentially reversing the recent trend of shifting production to Southeast Asian countries like Vietnam and Cambodia. This dynamic is forcing brands to weigh cost benefits against supply chain diversification amidst ongoing tariff and labor cost pressures.
Nike is expected to report a year-over-year earnings decline for its second quarter. The forecast comes amid shifting production dynamics and cost pressures in its key Asian manufacturing hubs, creating uncertainty for the stock.
U.S. tariff policies are compelling global partners to establish new trade alliances, leading to supply chain diversification away from the United States and increasing the risk of American economic isolation. This shift is marked by rising consumer costs and strategic pivots by former key trading partners.
Record holiday shopping figures are masking underlying economic pressure. Retailers, having absorbed tariff-related costs to maintain holiday pricing, are now signaling significant, broad-based price increases for consumers in early 2026.