Obama Proposes Tariff Reduction And TPP Agreement To Bring New Opportunities For Nike Development

The agreement is initiated by the New Zealand, Singapore, Chile and Brunei countries in the Asia Pacific Economic Cooperation Conference, and began a group of multilateral relations free trade associations since 2002. Now there are 11 member countries, including Vietnam and Mexico. The most important part of the agreement is tariff reduction, that is, 90% of the tariffs on member states are immediately waived. The United States joined the TPP negotiations in 2013, but it failed to sign the agreement because of persistent opposition from the Congress.

The Obama administration hopes to sign formally. TPP protocol To transfer some manufacturing jobs to the United States, he promised that "this will not only create more skilled and highly paid job opportunities in the market, but also reduce product prices by reducing import tariffs on manufacturing industries."

"We support President Obama's implementation of this trade initiative." Resistance Ke Gong Mark Parker, chief executive officer and chief executive officer, said, "the signing of the TPP agreement means a reduction in import footwear tariffs. This will not only drive Nike products' innovation in business expansion, but also further increase investment to promote the overall development of the US manufacturing industry".

With the support of Obama's political propaganda, Nike's fundamental starting point is to improve the price competitiveness of products. Vietnam and Mexico are the main foundry countries of Nike, employing millions of contract workers locally.

According to Nike's 2014 earnings report, the company currently has 150 shoe factories in 14 countries. Among them, several countries with a large share of production share are Vietnam 43%, China 28% and Indonesia 25%. The United States imports an average of 10% tariffs on imported shoes and products, and eventually these taxes and labor costs will be transferred to the price of products. If the cost of this part is reduced by signing TPP, it will increase Nike's pricing flexibility.

Nike also announced that once the TPP agreement was formally finalized, Nike will accelerate the development of high-end innovative footwear manufacturing methods, with the ensuing of more than 10 thousand jobs. In the next ten years, this advanced manufacturing model is expected to create more employment opportunities in the United States, including thousands of manufacturing and engineering jobs, as well as up to 40 thousand supply chain service jobs.

But not all. Sports brand They are on the same line with Nike. The US sports brand New Balance, based in Boston, has an objection to signing TPP. New Balance is one of the few shoe brands that retain production business in the United States. If the competitor Nike gets a bigger pricing space, it will mean that the competition between the two companies will be more intense for New Balance.