A Nike store is pictured in Sanlitun on March 27, 2021 in Beijing, China.
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Nike CEO John Donahoe acknowledged geopolitical tensions are rising with China – one of its largest markets – but said decoupling from the region would be “disastrous” for global trade.
During a sit-down interview at the inaugural CNBC CEO Council Summit in Santa Barbara, California, on Monday evening, CNBC’s Sara Eisen asked Donahoe about the threat of China invading Taiwan and Beijing’s position in Russia’s war with Ukraine.
“You have to be wondering about first of all, non-zero-percent chance that China invades Taiwan, and then creates a major issue with the United States, that China supplies Russia with military aid, I mean, what happens to Nike in these scenarios, which will create even more tension between the U.S. and China?” Eisen asked Donahoe.
In response, Donahoe said risk is everywhere for companies like Nike that operate on a global scale.
“If you’re a global company, you’ve got to just accept that and try to steer a course that is consistent with your strategy and consistent with their values,” said Donahoe.
“The business has to step up when the political institutions are in the state they’re in today and so we’re committed to being a global company, whether that be in China, whether it be in other markets, and yes, there’s risk and you know, we’ve done some contingency planning like all of us have, but we’re clear, we’re going to try to keep moving forward,” he said.
Donahoe said global trade is a good thing for the economy – and geopolitical relations. He said consumers around the world benefit from it.
“We believe that frankly, it can almost help promote peace and understanding,” he said.
When asked if there are any plans to “decouple” from the region, Donahoe said no.
“I think decoupling would be disastrous economically between the U.S. and China or China and the European Union. If you really look at the trade flows, both ways, they play a mutually valuable role,” he said. “Again, we believe in global trade and we’ll continue to try to do everything we can to support that. … We believe that both economies and the European economy as well benefits from thoughtful balanced trade.”
Donahoe said China – the sneaker giant’s third-biggest market by revenue – is vital to Nike. He added it is important to adhere to the country’s local standards, while not violating any “global rules,” such as human rights violations.
“We very much understand ourselves to be a local citizen with our China consumers and our China team,” Donahoe said. “We’re trying to maintain very much of a long-term view during this period, there have been ups and downs over history and we’re blessed where we have strong leadership position.”
