Nike (NKE) stock plummeted 6.87% in a 24-hour period on Wednesday, following President Trump's announcement of new reciprocal tariffs that could significantly impact the sportswear giant's operations and profitability. The tariffs, which include a 46% rate on Vietnamese imports, 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.

The proposed tariffs come at a challenging time for Nike, which has already been grappling with softening sales and underperforming stock prices. Over the past year, Nike's stock has declined by 30.03%, significantly underperforming the S&P 500's 7.42% gain during the same period. The new tariffs could force Nike to either absorb higher production costs or raise prices for consumers, both of which could further strain the company's profitability.

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 impact extends beyond Nike, affecting other major players in the footwear and apparel industry such as Adidas, 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.