JULY 30 – Adidas has warned that US tariffs will cost the German sportswear giant a further €200m (£173m) and confirmed that it will raise prices for American customers.
Nearly half of the company’s products are made in Asian countries which recently agreed trade deals with the US.
Announcing its latest results, Adidas chief executive Bjorn Gulden said the tariffs “will directly increase the cost of our products for the US”.
He admitted that the company still does not know what the impact will be on customer demand “should all these tariffs cause major inflation”.
Earlier this month, the US struck trade deals with both countries, agreeing to impose a 20% tariff on goods from Vietnam and a 19% tariff on Indonesian-made products.
US companies that ship in Adidas products to sell in America have to pay the tariff.
The sportswear giant, which makes the popular Gazelle and Samba trainers, had previously warned that it cannot produce most of its products in the US.
Mr Gulden said US tariffs have already impacted the company but he said the latest indications point to tariffs directly increasing “the cost of our products for the US with up to €200m during the rest of the year”.
Despite the impact of tariffs, Adidas reported a 7.3% increase in sales to €12.1bn in the first half of the year with pre-tax profit jumping from €549m to €1bn.
Footwear sales increased by 9% in the second quarter of the year between April and June while clothing revenue rose by 17%.
Earlier this week, Trump sealed a deal with the European Union (EU) to impose 15% tariffs on all imports, including cars ahead of a 1 August deadline.
He has previously threatened a 30% US tariff on goods from the EU.
However, while the eventual tax is lower, major EU economies including Germany have spoken out against the deal.
Germany’s chancellor Friedrich Merz is it would hit the US and cause “considerable damage” to his country.
On Wednesday, two of Germany’s best-known carmakers outlined how US tariffs had hit their businesses so far.
Mercedes-Benz said the tariffs, which the company expects to cost it nearly €420m this year, were largely to blame for second-quarter profit falling by nearly 70%.
Fellow luxury car brand, Porsche said it had increased prices by up to 3.6% to cover the cost of higher import taxes.
Meanwhile in the UK, Aston Martin warned its profits would be marginal this year due to the levy.
Earlier this month, Stellantis which owns including Vauxhall, Jeep and Peugeot said the tariffs had already cost it €300m.
By BBC
