Nike Inc. (NYSE: NKE) saw its shares plunge 5.03% in Tuesday's trading session, as investors reacted to President Donald Trump's announcement of new "reciprocal tariffs" that are set to significantly impact the company's global supply chain.

The sportswear giant, which relies heavily on manufacturing in Vietnam and China, is facing a double blow from the latest trade policy developments. Trump has imposed a 46% tariff on imports from Vietnam and increased tariffs on Chinese goods to 54%, up from the previous 20%. These two countries, along with Indonesia, account for approximately 95% of Nike's shoe production.

Analysts are concerned about the potential impact on Nike's profit margins and pricing strategy. The company will likely face the difficult choice of either absorbing the increased costs or passing them on to consumers, potentially risking sales volume. Additionally, there are fears that growing anti-American sentiment in China, exacerbated by the trade tensions, could lead to boycotts of U.S. brands like Nike in one of its key markets.

While Nike has been working on a turnaround strategy under the leadership of Elliott Hill, who came out of retirement to lead the effort, these new tariffs present a significant hurdle. The company was already grappling with increased competition and a need to refocus its brand strategy. Now, it must also navigate the complexities of a rapidly changing global trade landscape.

Despite the current challenges, some analysts remain optimistic about Nike's long-term prospects, citing the strength of its brand and ongoing product innovation. However, the company's ability to adapt to these new trade realities will be crucial in determining its performance in the coming quarters.