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Nike doesn't sell shoes. Those are a loss leader. They sell you brand and lifestyle bullshit at a very high markup.
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Their population is declining, and they are a long way away from parity with the west on a per-capita basis. I think China missed their opportunity. Also, the UK hasn't dominated finance for a century and has never been dominant in services, so it doesn't seem like an apt comparison.
> Their population is declining Not where it matters. China has a much larger under-employed population base than the US has. They still have a few hundred million peasant farmers whose children can and are getting educated and moving to the city. Their pool of labour is growing while the US's is stagnant. Not that it needs to grow -- over the last decade or so China's factory employment has been relatively constant…
And those children will be burdened with caring for their elderly parents, often alone, continuing to keep internal consumption low. They are automating and moving up the supply chain, but have a long, long way to go as a nation.
I don't understand this paragraph. If Footlocker was okay with $50 profit/shoe, why do they need to claim $75 profit/shoe in their costs per shoe go up? The costs of handling the shoes, retail space, advertising, and labor are all fixed.
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That completely discounts the strategic value of self-sufficiency. I mean, why not outsource ALL manufacturing and agriculture if someone else can do it cheaper? Surely that wouldn't come back to bite us, right?
Self sufficiency is just not a credible argument here. This is about consumer footwear, not agriculture (nor all of manufacturing). The US (and most other nations that can afford to) is perfectly used to throwing ~$20 billion at the sector to keep local agriculture operational. We did not do this for literally every industry in the past because we had (and have) neither the idle workforce to do this, nor does the loc…
Btw the one thing that will be left to show is a wider realization that it's a bad idea to elect a crazy person.
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They'll start forcing us to make Nikes in prison. Even then the quality wouldn't be up to par. Since we've collectively agreed we don't need to have due process anymore, I guess I can look forward to making shoes will I'm being indefinitely detained.
But even that is impossible in the near-to-medium term. The US just doesn't have the supply chain that China does. You need to be able to source the materials, and they have, effectively, entire cities dedicated almost wholly to producing those "intermediate" raw materials—eg, things like the grommets for the shoelaces, the big sheets of faux leather that can be cut to the right size & shape to make the body, etc. Th…
If an investor wants to build a factory to produce shoes (a process that can take years), they need to be sure that the tariffs won't just go away next year.
Trump's tariffs are anything but this.
> But if we bump the cost of freight, insurance, and customs from $5 to, say, $28, then they wholesale the shoes to Footlocker for about $75. And if Footlocker purchases Nike shoes for $75, then they retail them for $150. Everyone needs to fixed percentages to avoid losses. I don't understand this paragraph. If Footlocker was okay with $50 profit/shoe, why do they need to claim $75 profit/shoe in their costs per shoe…
Americans need to get over their view of “Asia” as being about making shoes. When I was working in engineering in the early aughts, we mocked the Chinese as being able only to copy American technology. Today, China is competitive with or ahead of America in key technology areas, including nuclear power, AI, EVs, and batteries. We need to anticipate a future where China is equal to America on a per capita basis, but f…
Their population is declining, and they are a long way away from parity with the west on a per-capita basis. I think China missed their opportunity. Also, the UK hasn't dominated finance for a century and has never been dominant in services, so it doesn't seem like an apt comparison.
Earlier quoted context omitted.
I'd say this is more satire than propaganda.
Political satire usually is propaganda.
“Wholesome Biden & Obama memes” are probably propaganda. And videos about “fat Americans” being marched into factories sounds like something the Chinese could make.
From a $100 shoe that sells for $76:
- $24 goes overseas (22 cost, 2 freight)
- $8 goes to the US gov't (3 import, 2 Nike tax, 3 Footlocker tax)
- $33 goes to US employees or businesses (5 Nike marketing, 11 Nike expenses, 17 Footlocker expenses)
- $5 goes to Nike (11% return)
- $6 goes to Footlocker (8% return)
But now with 100% tariffs, it's a $100 shoe that sells for $100 (or a $132 shoe that sells for $100) and:
- $24 goes overseas (22 cost, 2 freight)
- $29 goes to the US gov't (22 import, 3 Nike tax, 4 Footlocker tax)
- $33 goes to US employees or businesses (5 Nike marketing, 11 Nike expenses, 17 Footlocker expenses)
- $7 goes to Nike (11% return, 7.15 exactly)
- $7 goes to Footlocker (8% return, 7.45 exactly)
And if a US shoemaker wanted to undercut the import, a Made in USA shoe that sells for $100:
- $7+ goes to the US gov't (? shoemaker tax, 3 Nike tax, 4 Footlocker tax)
- $79 goes to US employees or businesses (46 to shoemaker, 5 Nike marketing, 11 Nike expenses, 17 Footlocker expenses)
- $7 goes to Nike (11% return, 7.15 exactly)
- $7 goes to Footlocker (8% return, 7.45 exactly)
Nike doesn't sell shoes. Those are a loss leader. They sell you brand and lifestyle bullshit at a very high markup.
"In fiscal 2024, footwear accounted for 68 percent of Nike's total revenues." https://www.statista.com/statistics/412760/nike-global-reven...