Nike might have just lost a $2 million deal after pulling its American flag sneakers

Nike/Colin Kaepernick via Twitter

Colin Kaepernick starred in a 2018 Nike campaign.

• One day after Nike pulled its Betsy Ross-inspired American flag sneakers, Arizona Gov. Doug Ducey announced plans to withdraw financial incentives for the company to build a manufacturing plant in the state. 

• If approved, the decision would revoke a waiver of $1 million in development fees, as well as a reimbursement of up to $1 million for creating jobs in the state. 
• The Air Max 1 USA shoe was pulled after former NFL player and social justice advocate Colin Kaepernick reached out to the company to express concern with the use of slavery-era imagery on the shoe. 
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Nike's decision to pull its Betsy Ross-inspired American flag sneaker is coming at a cost - to the tune of $2 million. 

A day after the company decided to pull its Air Max 1 USA shoe, Arizona Gov. Doug Ducey took to Twitter to announce plans to withdraw financial incentives for Nike to develop a manufacturing facility in the Phoenix suburb of Goodyear. The much-anticipated development would have been Nike's third manufacturing plant in the US and was expected to bring 500 jobs to the state, according to The Arizona Republic.

"Nike has made its decision, and now we're making ours," Ducey wrote on Twitter. "I've ordered the Arizona Commerce Authority to withdraw all financial incentive dollars under their discretion that the State was providing for the company to locate here."

He continued: "Words cannot express my disappointment at this terrible decision. I am embarrassed for Nike. Nike is an iconic American brand and American company. This country, our system of government and free enterprise have allowed them to prosper and flourish."

If the state's commerce authority approves Ducey's order, it would effectively revoke the state's plan to waive $1 million in fees and to provide a reimbursement to Nike of up to $1 million for job growth.

"We are delighted to welcome Nike to Goodyear," Councilwoman Wally Campbell told The Arizona Republic when the partnership was announced in May. "We look forward to a long-lasting relationship."

A spokesperson for Nike did not immediately return Business Insider's request for comment. 

Nike officially nixed the flag-design shoes on Monday, after former NFL player and Nike partner Colin Kaepernick called out its use of an "offensive symbol" of slavery-era imagery, The Wall Street Journal reported. Kaepernick reached out to company officials after noticing the heel of the shoe - which launched this week in tandem with the Fourth of July holiday - includes a version of the American flag created during the American Revolution. Known as the Betsy Ross flag, the symbol features 13 stars in a circle to symbolize the original 13 colonies.

"Nike has chosen not to release the Air Max 1 Quick Strike Fourth of July as it featured the old version of the American flag," a Nike representative told INSIDER in an email. 

Still, the shoe has continued to draw outrage from users on social media, some of whom have expressed intention to boycott the brand moving forward. 

Kaepernick continues to be an outspoken figure in the professional sports community after leading the movement to kneel during the national anthem prior to the start of football games, in an act of solidarity against racial injustice.

In 2018, Nike took a bold stance in appointing Kaepernick as the face of a major campaign while he was embroiled in controversy.