The Kicks You Wear, Vol. 413 — The price of everything is going up 💰
The tariffs are here and Nike is weeping
Good morning, folks! Welcome back to the Kicks You Wear. Thanks so much for giving me a bit of your time today. Appreciate you.
I have pledged to myself and my wallet that I will not buy a pair of sneakers in April. Coincidentally, the Neon Air Max 95s come out this weekend. Are we sure it’s April? Are we absolutely sure it’s April and not just March 33rd? Somebody please help me.
Let’s dive in. This is a rough one.
Trump’s tariffs are ravaging everything
The draconian Trump tariffs that we’ve been talking about for the last few months are finally here and, folks, they’re far worse than anyone had imagined.
That’s saying a lot because we knew they’d be pretty bad.
Any sort of tariff is significant. Global trade is the lynchpin to so many economic ecosystems across the globe, including the United States’ own. Tariffs are taxes that disrupt that flow of goods. Even the smallest ones.
Get familiar: Here’s more from the Kicks You Wear on how tariffs work
But we’re not talking about small ones here. This isn’t, say, a 10 percent tariff here or there. That’s the baseline. Trump has tacked even more onto individual countries. The president’s tariffs on individual nations are climbing as high as 54 percent.
By the numbers:
Vietnam had the fourth-highest tariff rate of 46 percent on Trump’s list. Only Cambodia (49%), Laos (48%) and Madagascar (47%) are higher.
Chinese imports are getting a 34 percent tariff in this round. But that’s already on top of a 20 percent tariff already being imposed. The true tariff rate is 54 percent.
There’s also a 20 percent tariff on European Union goods, a 32 percent tariff on Taiwanese goods and a 25 percent tariff on South Korean goods.
The goal: The Trump administration has three clear goals in my eyes.
The first: Implementing an agenda to establish a white, Christian nationalist regime in America. That’s why they’re disappearing people they disagree with and erasing non-white history.
The second: Create a power vacuum by destabilizing the government and giving the president sole control over policy and the rule of law. That’s why he’s firing federal employees and dismantling government organizations.
The third: Implementing an “America First” agenda that isolates the country from our global economic partners and forces the companies that operate here to sell and manufacture goods here.
The tariffs fall in that third bucket. This strategy is supposedly built to bring manufacturing jobs into the United States and keep their dollars here. That might sound good in theory, but think about what it means in practice.
Now, I’m no economist. But these tariffs are essentially imposing a $714 billion tax on Americans. Most of that will fall heaviest on the least fortunate among us. Folks will return to hoarding cash and saving as best they can for rainy days. Prices for essential goods will rise and the economy will slow significantly.
This won’t be worth it. The end goal here is unrealistic. It took years for Nike to shift the bulk of its manufacturing process from China to Vietnam. It’d take even more time to move the entire operation into America.
Going even further, how realistic is it for anyone to expect Apple to move iPhone production to America? Or for the auto industry to produce every part for every car right here in the USA? Even if you could do that, the price increases people would face might make buying necessities like a phone or a car unattainable for many people.
The results: So now we’re left with a cratering market. Companies are panicking. Employees in specific industries are already being laid off. The pain that the Trump administration told everyone would be here is here. And it’s painful, indeed.
That’s the big picture. But let’s zoom in on sneakers.
Everyone’s bad just got so much worse
These last few days have been a bloodbath in the sneaker world. This graphic from Nice Kicks shows how much of a bloodbath it’s been.
We haven’t seen anything like this since the early days of the COVID-19 pandemic.
The difference is that this time it’s not an external force of nature forcing this shift. It’s a self-inflicted, unnecessary wound from this administration.
Footwear and fashion will be hit hard by these tariffs. The highest rates impact the countries that are the industry’s most prominent sourcing regions.
Let’s use Nike as an example here to show how deep the reach is in some of these countries.
Factories in Vietnam manufacture 50 percent of Nike’s footwear and 28 percent of Nike’s apparel. The country is the brand’s largest market, per Sportico.
China comes in at 18 percent on footwear and 16 percent on apparel, so the country is still one of the brand’s most prominent manufacturing sources.
Why this matters: The tariffs leave Nike with nowhere to run. Vietnam imports are being taxed with a 46 percent tariff. China’s true tariff rate is 54 percent. Nike will have to foot that bill, which, ultimately, means the folks like you and me who buy Nike will have to foot that bill.
Your shoes, apparel and everything else coming from the brand will be more expensive. It won’t just be the hyped shoes — it’ll be the everyday joints. Everything from the Air Jordan 1 to the Air Monarch falls into this category.
That won’t just be Nike. It’ll be most of the footwear and apparel brands you know and love.
The big question: How much more expensive will things get? That’s something we can’t necessarily know right now. Reuters reports that there’s a chance footwear prices could shoot up by 10 to 12 percent. Your average pair of Jordan 1s might be $200 now instead of an already expensive $180.
The other side: While that’s not unrealistic, it’s still too early to say anything definitively. While the tariffs are in, there’s still a window for negotiation. It’s unlikely, but maybe there’s an exemption from the administration out there for some of these brands, similar to the one granted for US automakers in early March. Maybe Trump will see the reaction and peel some of these tariffs back.
Regardless, as things stand, the industry isn’t in a great spot. I’d argue it’s the worst possible spot.
Puma found new leadership
Buried amid all this chaos is Puma moving on to new leadership — a move that feels like a much-needed one.
What happened: Former Adidas sales chief Arthur Hoeld is taking over as Puma’s CEO in place of Arne Freundt, starting July 1.
Freundt took over at Puma following Bjorn Gulden’s departure to Adidas at the top of 2023. He signed a four-year job deal but is leaving after two.
Hoeld left his position as sales chief for Adidas in October of last year and now takes over as the lead at Puma.
The why: Freundt is headed for an early exit at the brand because of what the company calls “differing views on strategy execution,” according to Reuters.
Puma has been on a steady downturn since Gulden’s departure at the top of 2023. Similar to Nike, the brand has grown stale in terms of product offerings and newness. Its sales have slowed behind it. That’s why Freundt announced a new cost-cutting plan coming into this year.
We’ll see what moves Hoeld has in his pocket to turn things around.
Another brilliant Adidas move
Speaking of Adidas, the brand is in its bag with marketing its athletes. Adidas introduced a new video series called “Illuminated.” The series takes you behind the scenes with the brand’s top athletes and showcases their support systems.
First up? Anthony Edwards and his homie Nick Maddox.
This rules. Any more time we spend with Anthony Edwards while he’s just being Anthony Edwards is always a delight.
On top of that, it’s something that will ultimately bring the fans a bit closer to their favorite athletes on Adidas’ roster. It’s like giving a fan a BTS look in the development of a sneaker. It grounds everything and connects you a bit more as a fan.
Good play, Adidas. Gooood play.
#TheKicksWeWear
Y’ALL KNOW THE VIBES! Let’s get it!
First the homie Waterloo got us popping live from the Elite 8. This man really brought out the HEATERS y’all.
The homie Mark came through with the Ronnie Fieg 997.5s. What a beautiful sneaker. Kith, man. They don’t miss.
The homie Nico came through with the Brick 4s and I MUST HAVE THESE.
Then the homie Sumeet came through with the Undefeated x Nike Spiridons and I ALSO MUST HAVE THESE. Did I mention I’m not buying shoes in April?
My dog Gregory the Greek sent us home with the Concepts 1000s. Ima rock these this weekend now. Thanks for the motivation, my boy.
Y’all SMOKED that. Goooood stuff.
That’s a wrap, folks. Thanks so much for reading today. I appreciate your time. Have a fantastic weekend.
If you have any questions, comments or concerns feel free to hit me up via email at mikedsykes@gmail.com or shoot me a message via Substack.
As always, peace and love. Be safe, be easy, be kind. We out.
-Sykes 💯
Those Kith New Balances are so clean. Is there any way to cop via a store or do I need to enter a raffle of some kind?