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Nike CEO John Donahoe says decoupling from China would be ‘disastrous’

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 were rising with China – one of its biggest markets – but said decoupling the region would be “disastrous” for global trade.

During an interview at CNBC’s inaugural CEO Council Summit in Santa Barbara, Calif., on Monday night, CNBC’s Sara Eisen asked Donahoe about the threat of China’s invasion of Taiwan and Beijing’s position in Russia’s war with Ukraine.

“You have to wonder first of all, the non-zero probability that China invades Taiwan and then creates a major problem with the United States, that China provides military aid to Russia, I mean, what happens to Nike in these scenarios, which will create even more tension between the United States and China? Eisen asked Donahoe.

In response, Donahoe said risk is everywhere for companies like Nike that operate globally.

“If you’re a global company, you just have to embrace that and try to follow a path that’s consistent with your strategy and consistent with their values,” Donahoe said.

“The business must step up when the political institutions are in the state they are in today and so we are committed to being a global business, whether in China, whether in other markets , and yes, there is a risk and you know, we have made contingency plans like all of us, but we are clear, we will try to keep moving forward,” he said.

Donahoe said global trade is good for the economy — and geopolitical relationships. He said consumers around the world are benefiting from it.

“We think frankly it can almost help promote peace and understanding,” he said.

When asked if there were any plans to “decouple” from the area, Donahoe said no.

“I think decoupling would be economically disastrous between the United States and China or China and the European Union. If you really look at trade flows, both ways, they play a mutually valuable role,” he said. -he declares. “Again, we believe in global trade and we will continue to try to do all we can to support it. … We believe that the European economies and economy also benefit from thoughtful balanced trade.”

Donahoe said China – the sneaker giant’s third-largest market by revenue – is vital for Nike. He added that it is important to respect the local standards of the country, without violating “global rules”, such as human rights violations.

“We fully understand ourselves as a local citizen with our Chinese consumers and our Chinese team,” Donahoe said. “We are trying to maintain a long-term view during this time, there have been ups and downs throughout history and we are blessed to have a strong leadership position.”

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