Tariffs Threaten Nike's Vietnam Stronghold

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TARIFF
Bold move or a costly bet?

Trump is about to shake up global trade like never before. His new tariffs, set to take effect immediately, could trigger economic ripples worldwide. For months, he’s vowed to impose "reciprocal" tariffs, claiming the U.S. has been exploited by unfair trade deals. But the specifics remain unclear, and the stakes are massive. The new levies could follow two approaches: a tariff rate based on what other countries impose on U.S. goods or a flat 20% tariff on all imports. Either way, it’s a step toward an all-out trade war.

Nations like Canada, China, and the EU are already preparing countermeasures, and businesses fear rising costs. Economists warn of inflation, slowed growth, and an increased recession risk, with Goldman Sachs raising its probability to 35%.

ECONOMY
Nike’s Vietnam dilemma

Nike could soon face another major setback in its struggle to revive sales—U.S. tariffs on imports from Vietnam. As President Trump prepares to announce new trade measures, Vietnam’s massive $123.5 billion trade surplus with the U.S. puts it squarely in the crosshairs.

With 50% of its footwear and 28% of its apparel produced in Vietnam, Nike is deeply exposed. If tariffs rise, the company will have to absorb higher costs or raise prices—both risky moves amid falling revenue. Adidas, sourcing 39% of its footwear and 18% of apparel from Vietnam, is in a similar predicament. The sportswear industry, which moved production to Vietnam to avoid China tariffs, is now running out of safe havens. Lululemon, Columbia Sportswear, and Amer Sports all rely heavily on Vietnamese manufacturing, and smaller brands like On, which sources 90% of its shoes from the country, could be hit even harder.

With U.S. consumer confidence at a four-year low and sneaker prices already up 25% since 2019, further price hikes could backfire. Moving production is no easy fix—Cambodia and Indonesia face rising costs and potential tariffs, too.

Despite the risks, Vietnam may escape the worst. The country has worked to stay in Trump’s favour with trade concessions, Starlink access, and potential billion-dollar Trump Organization investments. Some experts believe the tariffs will be milder than those on China, but for Nike and other brands, the uncertainty alone is a major blow.

ENERGY
Oil’s balancing act

Oil prices nudged higher on Wednesday as traders braced for fresh U.S. tariffs that could disrupt global trade and impact crude demand. Brent crude rose 0.2% to $74.62 per barrel, while WTI gained 0.4% to $71.51.

Despite a bearish U.S. inventory report showing a surprise 6.2 million-barrel build, markets held steady. Analysts pointed to a surge in Canadian crude imports—possibly a preemptive move ahead of potential tariffs—as a key reason for the unexpected stockpile increase. With President Trump set to unveil new trade measures at 2000 GMT, concerns over inflation, slowed economic growth, and supply chain disruptions loom large. Brent’s rally has stalled above $75, as traders shift focus from supply concerns to the economic fallout of Trump's policies.

Market watchers fear aggressive tariffs could send crude prices tumbling, while mild measures may leave them unmoved. Further complicating the picture, Trump has hinted at secondary tariffs on Russian oil, while Moscow has restricted oil exports via the Black Sea. With trade tensions mounting and global supply chains in flux, the next few hours could set the tone for oil markets in the weeks ahead.

AI & TECHNOLOGY
Fake receipts and fraud concerns

ChatGPT’s latest image generator is impressively accurate at inserting text into images. But with that comes a new problem—fake restaurant receipts.

Users have already started experimenting. VC Deedy Das posted an AI-generated receipt from a real San Francisco steakhouse, while others created even more convincing versions, complete with food stains and crumpled textures. A LinkedIn user in France shared one that looked strikingly authentic.

Though minor flaws—like incorrect formatting and faulty math—gave it away, those are easy fixes with basic editing. The implications? Fraudsters could use this tool to forge expenses and manipulate reimbursements.

OpenAI insists all AI-generated images contain metadata, and they take action against policy violations. But when asked why the tool allows fake receipts at all, the company defended it as a creative feature, useful for financial education or marketing.