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Nike versus New Balance: Trade Policy in a World of Global Value Chains

Nike ou New Balance : les politiques commerciales dans un monde de chaînes de valeur internationales

Case 9 00 2014 001
Case published in the International Journal of Case Studies in Management, Vol. 12, No. 4
Languages : 
  • French,
  • English
  • Offshoring,
  • Global value chains,
  • Trade policy,
  • Fair trade,
  • Comparative advantage
  • Délocalisation dans un autre pays,
  • Chaînes de valeur mondiales,
  • Politique commerciale,
  • Commerce équitable,
  • Avantage comparatif
Year of production : 
Registration date : 
Teaching notes included : 

In 2013, Michael Froman, the newly appointed United States Trade Representative, was responsible for leading the U.S. negotiating team in the formulation of the terms of the Trans-Pacific Partnership (TPP). During the negotiations, Froman had to adopt a position on the sensitive issue of tariffs on imported footwear. On the one hand, Vietnam, a TPP member country, was America’s second largest foreign footwear supplier and was pushing for the elimination of tariffs. On the other hand, U.S. labour unions argued that Vietnam’s strength in the footwear industry was based on unfair subsidies and labour practices. Even among U.S. footwear companies, there was disagreement. New Balance, the only U.S. athletic footwear company that produced parts of its shoes in the U.S., was openly opposed to the elimination of tariffs, as their removal could lead to factory closures in the U.S. Nike Inc., however, manufactured all its shoes overseas and was an overt proponent of the abolition of tariffs. Froman had to carefully weigh the arguments of all the stakeholders to determine whether or not to accept the lowering of tariffs on footwear imported from Vietnam and, if he accepted, whether or not to impose conditions on Vietnam.

Seul le cas est disponible en français.

En 2013, Michael Froman, le nouveau représentant commercial des États-Unis, est chargé de diriger l’équipe de négociation américaine dans la formulation des modalités du Partenariat transpacifique (PTP). Il doit prendre position sur la question délicate des droits de douane sur les chaussures importées. D’une part, le Vietnam, un pays membre du PTP et deuxième fournisseur de chaussures des États-Unis, fait pression pour l’élimination des droits. D’autre part, les syndicats américains soutiennent que la force du Vietnam repose sur des subventions et des pratiques déloyales. Même les entreprises américaines ne s’entendent pas sur la marche à suivre. New Balance, la seule entreprise américaine de chaussures qui fabrique une partie de sa marchandise aux États-Unis, s’oppose à l’élimination des droits de douane, car une suppression entraînerait probablement la fermeture d’usines sur le sol américain. Nike Inc. quant à elle fabrique toutes ses chaussures à l’étranger et est un grand partisan de l’abolition des droits. M. Froman se doit de soupeser les arguments de toutes les parties pour déterminer s’il doit accepter ou non la réduction des droits de douane sur les chaussures importées du Vietnam et, s’il accepte, s’il y a lieu d’imposer des conditions à ce pays.

Primary domain : 
International business
Secondary domain : 
Sectors : 
  • Consumer goods,
  • Manufacturing
Source : 
HEC Montréal
Type : 
Traditional case (Decision-making case)
Type of data used in the production of the case : 
Factual data that is public and free of potentially litigious content
Event location : 
United States
Year of start of the event : 
Year the event ended : 
Business size : 
Main themes covered

Trade policy determination

Teaching objectives

The case provides a vehicle for analysing strategic, contextual, and ethical challenges underlying modern trade negotiations.

Concepts and theories related to the case

The case highlights three new key factors that trade negotiators must consider:

  1. the complexity of trade policies in the context of global value chains
  2. the nationality of a firm and its alignment with the economic interests of a country
  3. free trade versus fair trade