Tariffs raised to 50%! nike, crocs consider halting u.s. orders here

The lights in the factory in Tamil Nadu, India are still on, but orders are hesitant.

The United States will first impose a 25% reciprocal tariff on India (effective August 7), followed by an additional 25% "Russian oil" surcharge (effective August 27). At the same time, it is made clear that 'anti-circumvention' measures will incur an additional 40% ad valorem tax (HTSUS 9903.02.01), with provisions for correction and recovery, and according to the order, it is non-exemptible. (Supplementary non-exemption clause).

It's not just rumors; it's the kind that is written into the text by the White House and CBP (U.S. Customs and Border Protection) with executable guidelines for customs declaration.

The Confederation of Indian Textile Industry (CITI) stated that the imposition of a 50% tariff on Indian textile exports by the United States will undermine India's competitiveness, as India is one of the largest markets in this sector (CITI has publicly expressed this concern multiple times).

Former diplomat Rakesh Sood stated: "President Trump's two favorite things: tariffs and the Nobel Prize."

India is protesting, but there are no signs of exemption yet.

Tariff Schedule

On July 31, the White House announced a new "Reciprocal Tariff" table, with India at +25%, Vietnam at +20%, and Indonesia at +19%, among others. A buffer is provided for goods shipped before August 7 and declared before October 5.

On August 6, the White House signed another order to impose an additional 25% due to India's "direct or indirect import of Russian oil," effective August 27.

The above-mentioned new addition does not apply if the shipment is made before August 27 and declared before September 17.

The enforcement approach is clearly stated by CBP—once identified as "evasion/transshipment," a 40% duty will be applied per HTSUS 9903.02.01, and it may be corrected and retroactively assessed. There can be no luck in this matter.

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Unless an exemption or extension is negotiated before August 27, there will be a policy-related disruption in India's export channel for American shoes: companies will have to reorganize orders, customs declarations, and origin compliance.

Order in transit:

Brand and OEM's "Observation and Realignment"

According to Indian media reports from the Economic Times/The Times of India, Crocs and Nike are evaluating the suspension of new orders for the United States (media news, not yet confirmed by the companies). Although not a company announcement, the signal is clear: buyers are looking for more stable shipping channels.

An industry insider stated, "Indian manufacturers will lose U.S. orders. These orders will start shifting to places like Vietnam."

This matches the buyer structure:

In fiscal year 2024, approximately 50% of Nike's shoes are manufactured in Vietnam and 27% in Indonesia. According to Adidas's 2024 annual report, 27% of its production is in Vietnam, 19% in Indonesia, and 16% in China. The existing production capacity is already there, and temporarily "backshoring" would be faster.

Pallab Banerjee, the Managing Director of Pearl Global, a clothing manufacturer, stated that the company's clients include major American brands. "Orders that are already in transit will not be affected, but a 50% tariff is unacceptable for any business." (Times of India)

The emails sent to Walmart and Gap have yet to receive a response. According to informed sources, as of now, Walmart has not suspended or canceled any orders.

It can be said that short orders and urgent orders should first go through Vietnam/Indonesia, and long orders should wait to see the direction of negotiations between the US and India after September. OEM manufacturers should not rely on luck; it's better to ensure cash flow and production continuity first.

Why can Vietnam/Indonesia handle it?

The reason is very simple:

The reciprocal additional tiers differ significantly, and the production capacity is mature. India raised prices under the combination of +25% (8/7) +25% (8/27). Vietnam at +20% and Indonesia at +19% are relatively "light," and both places are already major hubs for sports shoes.

For the same model of shoes, the buyer will allocate the quantity to the side with less pricing pressure and higher delivery certainty.

Simon Lee, Vice President of the Indian Taiwanese Chamber of Commerce, stated: "We have sent detailed questionnaires to the global teams of Puma, Adidas, Nike, Converse, and Crocs, but have yet to receive a response. However, Puma and Adidas have indicated that India remains an important sourcing market for them."

Not doing calculations or providing "universal conclusions." Differences in rules are enough to trigger marginal transfer, and the scale and proficiency determine who can assimilate faster.

However, it should be noted that global supply chain adjustments may take several months and cannot be achieved immediately.

At the same time, Vietnam/Indonesia have more mature existing production capacities and supply networks, but short-term expansion is still limited.

The "survival kit" for manufacturers

Dual-track pricing: In the contract, specify August 27 as the price watershed, and include the in-transit clause (with the two cutoff points being 8/7/10/5 and 8/27/9/17).

Production scheduling shift: Prioritize domestic sales and non-U.S. markets, making the gap period for the U.S. line a phased approach.

Origin compliance: For collaboration with Vietnam/Indonesia, genuinely make substantive changes. FTZ can adjust the timing but cannot change the origin. Once labeled as "evasion" by CBP, 40% is directly charged, and no reductions or exemptions are allowed.

It should be noted that the US-India waiver negotiations may change the priority.

The window period

The rules have been implemented, and the guidelines have been made public. On top of the already high footwear MFN, adding reciprocity, Russian oil, and reverse logistics makes it challenging for India to reverse its dual disadvantage in pricing and compliance for non-leather shoes to the U.S. in the short term. For U.S. buyers, Vietnam/Indonesia remains a more stable fallback. Here are three points to watch:

Was there any exemption/deferral before August 27?

Whether the written agreement between the brand and the leading OEM has been implemented (suspended, transferred, or redirected for domestic sales).

Who will be affected by the first batch of CBP enforcement samples under 9903.02.01 (this will determine whether there is any remaining space for "country of origin washing").

However, it is still necessary to pay attention to uncertainties, such as the possibility of India suspending US military purchases in response (according to sources cited by Reuters, there is a possibility of suspending/slowing down some military purchase negotiations, with the official stance still evolving) to expand the negotiation space.

The Indian government, however, denied reports of halting military purchases.

As of August 12, 2025, no waiver announcement, but negotiations continue.