Trade Policy & Tariffs
This is the term for taxes imposed on imported goods, which Nike sought to eliminate to lower costs.
What are tariffs?
Nike’s supply chain relies heavily on this Southeast Asian country, known for its large-scale footwear production and low labor costs.
What is Vietnam?
New Balance stands apart from Nike by maintaining some of its shoe production in this country, despite higher costs.
What is the United States?
Nike and other multinational companies benefit from this type of trade agreement that reduces or eliminates tariffs between member nations.
What is a free trade agreement?
Unlike New Balance, Nike follows this type of production model, where it does not manufacture its own shoes but contracts factories overseas.
New Balance supported tariffs on imported shoes because they provided this type of protection for domestic manufacturers.
This trade rule requires that textiles and apparel be made from yarn produced in a free trade agreement country to qualify for tariff benefits.
What is the yarn forward rule?
Without tariffs, Nike claimed US companies could save on production costs and reinvest in these.
What are high-value-added jobs?
New Balance claims a tariff reduction would remove these and hurt their US contractors.
What are manufacturing jobs?