After months of escalating trade tensions, the US and China have agreed to significantly scale back reciprocal tariffs. But for companies like Apple and Adidas, the damage is already done. With production rerouted and sourcing footprints redrawn, the latest tariff de-escalation may be too little, too late to reverse the operational recalibrations already underway.
Tariff Cuts, But Production Has Shifted
Following negotiations in Switzerland, the U.S. and China announced on May 12 they would roll back the sweeping tariffs imposed earlier this year. The U.S. rate on Chinese imports drops from 145% to 30%, while China will cut its retaliatory tariffs to 10% from 125%.
While this may ease pressure on cross-border trade in the coming quarters, several multinationals had already initiated a strategic pullback from China as part of long-term de-risking. Apple, among the earliest movers, has shifted production to the U.S.-bound goods away from China. CEO Tim Cook confirmed that India and Vietnam are now central to the company’s manufacturing strategy. Foxconn, Apple’s lead supplier, is planning a $1.5 billion factory in India. That decision follows months of political pressure and rising operating risk tied to China.
President Trump, speaking in Qatar earlier this month, said he urged Cook not to build in India. But the move appears to be set. For Apple and others, the decision aligns with broader industry trends that prioritize geopolitical risk mitigation, supplier optionality, and access to emerging markets over short-term tariff relief.
Footwear Firms Face Pricing Fallout
While tariff relief may ease forward-looking cost structures, consumer brands are still digesting prior hits. According to BBC News, Nike’s shoe prices in the U.S. are expected to rise by up to $10 for models above $100. The company hasn’t linked the hikes directly to the tariffs, but timing suggests a connection.
Adidas has been more direct. The firm warned earlier this year that Trump’s tariff policy would push U.S. prices higher. Even with a revised 10% rate, those cost increases are already working through inventories and supplier contracts.
For procurement leaders, the net effect is limited short-term relief paired with continued volatility. Supply chain diversification efforts triggered by earlier tariff hikes remain in motion—and for most, are not reversible.
A Shift That Won’t Rewind
The reduction in tariff rates signals a cooling of trade tensions, but it doesn’t change the fundamentals that drove companies to reconfigure their supply chains. With labor costs rising in China and operational risk hard to model, many firms had already concluded that dependency on a single country was no longer tenable.
Even as political signals fluctuate, the new footprint is being built elsewhere. For supply chain leaders, the focus now turns to optimizing these new configurations, reinforcing risk buffers, and ensuring cost structures remain stable across diversified sourcing regions.
