Shane Parrish

They dug up an obscure customs rule that let the government recalculate import duties not based on what Nike actually paid for shoes overseas, but what on similar American-made shoes sold for domestically.

The difference was enormous, and they get it applied retroactively.

The customs bill was $25 million.

Nike's entire revenue at the time was $24 million.

The government was demanding more than the company earned in a year.

Phil was furious.

Nike hadn't broken any law.

The shoes were imported legally.

Duties were paid correctly at the time.

This was a retroactive rule change, weaponized by competitors who couldn't win in the market.

So they tried to win in a bureaucracy.

For the first time, he went political.

He hired lobbyists.

He ran TV ads.

He argued this wasn't about protecting American jobs.

It was about protecting American companies from competition.

The battle dragged on for years, and Phil Knight described it as one of the most stressful periods of his life, which, given everything else he'd survived, tells you something.

There were moments he believed they would lose, that this arbitrary bureaucratic weapon would accomplish what banks, suppliers, and the FBI had all failed to do.

Nike eventually settled for $9 million, still a staggering sum at the time.

The customs war taught Phil Knight something every successful founder eventually learns.