Trump's tariff policy: Adidas products become more expensive in the USA

Adidas expects the massive tariffs on imports from Asia to drive up prices for sports shoes and clothing in the US . It is "inevitable" that prices will rise there, said CEO Bjørn Gulden in Herzogenaurach. "But we won't be the first to raise them," he added. "We are not under financial pressure to act quickly." Adidas, like its rivals Nike and Puma, has shoes and textiles manufactured almost exclusively in countries such as China, Vietnam, Cambodia, and Bangladesh. US President Donald Trump wants to impose high import tariffs on imports from these countries. Relocating production to the US is currently not possible, said Gulden.

The looming trade war is also causing uncertainty in the sporting goods industry. "In a 'normal world,' with this strong quarter, the solid order backlog, and the overall very positive sentiment toward Adidas, we would have raised our full-year outlook for both sales and operating profit," said Gulden. "The uncertainty surrounding the US tariffs is preventing this at the moment." Since Trump's initial announcement, the situation has already changed twice. The US president initially suspended the tariffs for 90 days to allow time for negotiations. Adidas hopes that the tariff dispute will still be resolved.

The Franconian group is benefiting from the fact that its models are currently more in demand than those of its competitors. From January to March, operating profit jumped by 82 percent to 610 million euros, and sales increased by 13 percent, adjusted for currency effects, to 6.15 billion euros.

Meanwhile, Adidas is trying to minimize the impact. They brought as much merchandise as possible to the US before the deadline, Gulden said. Imports from China to the US have already been reduced to a minimum, and shoes produced there have been redirected to other countries. US customers have not yet felt the impact of the new situation, given the typical shipping times in the sporting goods industry. It takes six to seven weeks for goods from Asia to arrive in the US, Gulden said. Therefore, the impact will barely be reflected in the second-quarter figures.

Trump actually wants to target foreign companies and protect his own economy. But in the sporting goods industry, one company is being hit hardest – and it's from the USA.

Accordingly, there has been no noticeable reluctance to buy among customers in the US so far. How consumers will react to price increases remains to be seen. In the first quarter, sales there – adjusted for the clearance sale of rapper Ye (Kanye West)'s "Yeezy" product line – rose by 13 percent. Adidas generates 80 percent of its sales outside the US. There will be no price increases in other countries to offset the declining margins in America. "We want to be fair," said Gulden.

Adidas is maintaining its sales and profit forecasts for the current year, but acknowledges "that there are uncertainties that could impact these forecasts later in the year." The range of possible results has widened. Adidas expects high single-digit sales growth and an operating profit of between €1.7 billion and €1.8 billion this year.