Nike's China Exposure in Focus

By: crunchgodabruinknees

When you think Nike, you may also think China.

That's because some of Nike Inc.'s (NKE - Get Reportbest-selling sneakers are made in China: Air Jordan, for one.

As Nike gets ready to report fourth-quarter 2018 financial results on Thursday, June 28, analysts and other experts are weighing in on how China, and the growing trade war may impact its results.

There are two issues facing Nike and its brethren. One is that they have factories in China or contracts with Chinese manufacturers to make goods sold to U.S. customers; and two is that new tariffs may not be imposed on Chinese-made shoes shipped to the U.S., as those duties are currently targeting tech companies and staving off alleged intellectual property theft, neither of which figure into shoe manufacturing.

In fact, shoes imported to the U.S. -- of which 99% are -- are already hit with tariffs that average 11%, but which can go as high as 68% on certain footwear types, according to the Footwear Distributors and Retailers of America. That's thanks to the Smoot-Hawley Tariff Act of 1930, which originally imposed tariffs on 20,000 imported goods.

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