As we field c.30 calls regarding Xinjiang implications for Nike and Adidas, we take a deeper look at the NT and LT considerations. NT, we believe the impact to sales will be transitory and be limited to a quarter as we look at 5 cases for precedence. We quantify the impact below. LT, input cost inflation could persist but we think Nike and Adidas can navigate the situation better than others. Last week was the tipping point for Xinjiang We''ve been monitoring the Xinjiang situation since January (see note). Last Monday was a tipping point when Western powers sanctioned Chinese officials. China retaliated with sanctions against Europe last week and over the weekend China sanctioned the U.S. and Canada (see link). In Zinged by Xinjiang we provided a quick overview of the escalation since January. HandM and Nike were singled out by social media in China for taking a stance on Xinjiang. Several celebrities cut ties with Nike and Adidas, albeit only HandM has been removed from e-commerce platforms. How serious is this for Nike and Adidas? The situation could yet escalate further with the sanctions over the weekend. We believe it will prove transitory for a quarter as we examine 5 cases of precedence. If Nike''s China rev growth slows from 40% to 20% or 0%, this would amount to $260m-$600m in lost revs and EPS impact of $0.04 to $0.08. We tweak 4Q by $0.04. For Adidas, we cut 2021 EPS by 4%. Anta and Li Ning were both up Thursday and Friday. Another barometer is Baozun (US-BZUN) as it is the key e-com logistics supplier for Western brands. Nike is about 26% of sales, which we discuss more in this report, and the stock was down 18% last week. Where do we go from here? We believe the near term noise will be transitory as it is unlikely that Chinese consumers would want to cut off Western brands. The bigger risk is on the cotton supply chain as Xinjiang represents 20% of the world''s cotton, which we discuss in our January note. The U.S. embargoed...