Nike (NKE) stock tumbled 5.16% in after-hours trading on Wednesday, as investors reacted to news of proposed U.S. tariffs on Vietnamese imports that could significantly impact the sportswear giant's operations and profitability. The potential trade policy shift comes at a challenging time for Nike, which has already been grappling with softening sales and underperforming stock prices.

The proposed tariffs pose a substantial threat to Nike's business model, as the company sources approximately 50% of its footwear and nearly a third of its apparel from Vietnam. If implemented, these tariffs could force Nike to either absorb higher production costs or raise prices for consumers, both of which could strain the company's profitability. The situation is particularly concerning given Nike's recent financial performance, with the stock already down 30.03% over the past year, significantly underperforming the S&P 500's 7.42% gain during the same period.

This development is part of a broader effort by the U.S. government to expand tariffs beyond China, with Vietnam being targeted as the country's fifth-largest supplier of goods. The potential impact extends beyond Nike, affecting other major players in the footwear and apparel industry such as Adidas and smaller competitors like Puma and On Holding. As the April 2 enforcement date approaches, companies in the sector may need to quickly reevaluate their sourcing strategies and pricing models to mitigate the impact of these tariffs, potentially leading to price increases for American consumers.