Trump’s Tariff Talk Casts a Shadow Over Adidas and Puma Stocks
As Donald Trump clinched a win in the U.S. presidential election, the reverberations reached across the Atlantic, casting a shadow over European sportswear giants Adidas and Puma. On Wednesday, investor caution translated into a significant dip in the stock prices of both companies, driven by growing concerns over potential trade policies the newly elected president might reinstate under his “America First” agenda. In the early morning trading, Adidas shares dropped by 2.6 percent, while Puma faced an even steeper decline of 4.5 percent.
The unease surrounding Trump’s victory isn’t purely about political shifts but stems from the direct impact his trade policies could have on global businesses. Throughout his campaign, Trump had consistently vowed to shield the U.S. economy by imposing higher tariffs on imported goods, a move intended to bolster domestic production. The prospect of such tariffs poses challenges for many international brands, especially German companies like Adidas and Puma, that rely heavily on U.S. sales.
A market insider explained, “The prospect of increased tariffs is a particularly heavy burden for Adidas and Puma, given their reliance on the U.S. market.” With this election result, speculation is rife about which sectors Trump might target with tariffs, leaving international manufacturers to weigh their next steps carefully.
However, Adidas and Puma’s circumstances differ slightly when it comes to their resilience against these potential tariffs. According to one stockbroker, Adidas may have positioned itself a bit more favorably than Puma to withstand the impact of increased import duties. “It’s not necessarily the tariffs on German imports that are a primary concern,” explained the broker. “What’s more pressing are the tariffs Trump might impose on Chinese imports.” Over recent years, Adidas has worked to reduce its dependency on Chinese manufacturing, successfully bringing down its share of imports to the U.S. from China to around 14 percent. Puma, however, remains significantly more exposed, with approximately 32 percent of its U.S. imports still originating from China, placing it at a greater risk should Trump enforce stringent trade restrictions.
For Puma, the timing couldn’t have been more unfortunate. The company is still processing its latest quarterly earnings report, which, according to experts, largely aligned with market expectations. Yet, the broader market sentiment remains unsettled. Investors and analysts worry that any tariffs on U.S. imports could erode profit margins for both German companies. This is particularly concerning given that both brands, like many in the sportswear industry, are already operating in a highly competitive environment with tight margins and an ongoing need for innovation and marketing.
Another industry observer noted, “Higher tariffs could squeeze Adidas and Puma’s profitability in the U.S. and may lead to price increases for consumers—a challenging move in a competitive market.” The companies would then face a difficult choice: absorb the added costs or pass them on to American buyers, potentially affecting demand.
As analysts and investors mull over these concerns, the outlook for both Adidas and Puma remains clouded with uncertainty. The potential for tariffs could disrupt their U.S. business strategies and require rapid adjustments in their supply chains and pricing strategies. Meanwhile, many are watching closely to see if Trump’s trade policies will indeed follow the hard line he presented during the campaign.
This article originally appeared on FashionUnited.DE and was translated and edited for an English-speaking audience by Rachel Douglass, using the AI translation tool Genesis.