Nike Sued by Consumers for Not Refunding Tariff Costs

Nike was sued on Friday by consumers who accused the athletic apparel and footwear maker of ​not refunding tariff-related costs it passed on in the ‌form of higher prices. In a proposed class action, consumers said Nike should not be allowed to keep "significant" refunds it can expect after ​the U.S. Supreme Court in February struck down sweeping tariffs that ​President Donald Trump imposed under the International Emergency Economic ⁠Powers Act. Nike has said it paid about $1 ​billion in tariffs on imported goods as a result of ​Trump's actions. Consumers said Nike raised prices on some footwear by $5 to $10 and some apparel by $2 to $10 to offset the costs.

Total Retail's Take: Nike joins other retailers, including Costco and EssilorLuxottica, in being sued by consumers ​for allegedly failing to pass on tariff refunds. The result of this lawsuit may establish a precedent for how companies handle “reversed” tariff costs after already passing those costs on to consumers. While Nike certainly hopes to avoid paying out a financial settlement to members of a class-action lawsuit, especially amidst its ongoing turnaround, the larger issue surrounding this case is probably reputational. Nike and other retailers must appear sensitive to consumer concerns regarding corporate pricing power during a period of high inflation and trade disruption (i.e., rising gas prices). Preserving its reputation in the eyes of consumers is what will matter most to the athletic apparel and footwear brand going forward.