Nike has announced that the company is shifting some production away from China, but it also said that tariffs imposed by the Trump administration will cost it about $1 billion before it makes internal changes, which include “surgical” price increases in the United States this fall.

Nike is shifting production to avert looming tariffs in China. Production in China represents about 16 percent of the footwear that Nike imports into the U.S., Chief Financial Officer Matthew Friend said last week during a conference call.

That production will be cut to the high-single-digit range by the end of the 2026 fiscal year as Nike shifts production elsewhere, he said.

President Donald Trump and his Commerce Secretary Howard Lutnick last week said the U.S. and China have signed an agreement on trade, but provided no details.

Nike, Adidas, Under Armour and Puma were among 76 companies that signed on to a letter in April addressed to Trump, asking for a footwear exemption from reciprocal tariffs.

The letter warned tariffs would “become a major impact at the cash register for every family.”