r US companies.  Nike’s shares were up 4 per cent, Under Armour rose 2 per cent, and Levi Strauss gained nearly 2 per cent following the announcement. Shares in Abercrombie & Fitch were up less than 1 per cent, while Roger Federer-backed On Holding’s stock was up 3 per cent. Still, Trump’s announcement leaves much to interpretation. The terms of the deal remain vague, with no formal implementation timeline or specific exemptions disclosed. That lack of clarity is causing uncertainty among manufacturers and raising broader concerns about the future of regional supply chains. “There’s no detailed framework, no annexes, no implementation timeline, just a broad political agreement to reduce tariffs from the previously announced 46 per cent down to 20 per cent, and to move on. That’s not nothing, but it also leaves many unanswered questions,” Rich McClellan, policy and economic strategic advisor based in Vietnam, said on LinkedIn.  In the eye of the storm  Vietnam’s rise as a manufacturing hub has made it a linchpin in US consumer goods supply chains. Once overshadowed by China, the country has rapidly become America’s second-largest source of footwear, apparel and accessories, according to the American Apparel & Footwear Association.  Vietnam supplied half of Nike’s footwear output and more than a quarter of Adidas’ global product volume last year. Vietnam is also Adidas’ biggest supplier country, producing 27 per cent of the German brand’s products. Other countries, which have benefitted from diverted orders post-US-China trade tensions, like Cambodia, Indonesia, Bangladesh and even India are also watching closely.  While the 20 per cent tariff may offer Vietnam temporary relief, the country remains heavily dependent on Chinese raw materials, including textiles, trims and components. This raises the risk of exports falling under the 40 per cent transshipment levy, depending on how strictly rules of origin are defined and enforced. Absorbing or passing on costs? For global retailers, the deal presents difficult choices. Many brands have spent the past five years shifting production out of China, and Vietnam became the top beneficiary of that strategy. Now, even that alternative appears less secure. “Even with these new tariffs, Vietnam may still beat China on pricing. But the margin is thinner. For some products, it’s no longer a clear win, given China’s reliability and infrastructure,” said Anthony Sardain, CEO and co-founder of Cavela, a fully automated AI agent for product sourcing.  Retailers are now expected to adopt more complex strategies to manage rising costs. This may include modest price increases, redesigning products to reduce tariff exposure, and simplifying supply chains. Some companies may shift premium product lines to less affected markets or ramp up automation in facilities in markets like Latin America or Mexico to reduce reliance on Asian manufacturing altogether. “Diversifying away from China isn’t enough. Brands need to shift from opportunistic sourcing to strategic friendshoring, prioritising trade-aligned, politically stable partners,” said Sardain.  Nike, for example, has gradually lowered its dependency on Vietnam. Since 2023, it has reduced Vietnam’s share of its footwear production to 45 per cent by increasing output in countries like Indonesia and Mexico. Other companies, including Levi’s, Adidas and VF Corp, have also been investing in regional manufacturing capabilities in North Africa, Eastern Europe and Latin America. The latest developments may hasten those shifts. Retail analysts believe that, eventually, at least part of the added cost will be passed on to consumers. For American households, that could mean higher prices on apparel and footwear at a time when inflation remains a lingering concern. Further reading: AI, tariffs and secrets of success: What retail leaders talked about at WRC.