Key Takeaways
1. Trump announced a 145% tariff on electronics from China, negatively impacting U.S. companies like Apple.
2. Initial exemptions for certain tech items were quickly retracted, meaning higher import fees for Chinese-made electronics will continue.
3. Game consoles, including the Nintendo Switch 2, will not be exempt from the new tariffs, leading to potential price increases.
4. Most Switch 2 consoles are manufactured in China, making it difficult for companies to avoid the tariffs.
5. Nintendo has paused pre-orders for the Switch 2 in the U.S. and Canada, leaving the future price uncertain amidst potential cost increases.
Trump has decided to place a 145% tariff on electronics from China, which is a big setback for U.S. companies such as Apple.
Initial Relief and Subsequent Changes
Over the weekend, there was a moment of relief when the U.S. government mentioned that some tech items, including smartphones and laptops, would be exempt from the new tariffs. However, this relief was short-lived as Trump later clarified that this exemption wouldn’t apply. Instead, electronics produced in China will be assigned to a different tariff category (according to BBC). Consequently, Chinese-made electronics will still incur higher import fees.
Impact on Game Consoles
Even if the exemption for certain devices like smartphones and laptops is upheld, game consoles are reportedly not included in this exemption. Consoles such as the Nintendo Switch 2 will still be subjected to the hefty 145% tariff. Nikkei Asia has claimed to have obtained an internal memo from a key supplier for both Apple and Nintendo, indicating that game consoles will face the 145% tariff regardless of the circumstances. This implies that products like the Switch 2 could see a notable hike in prices within the U.S. market.
Manufacturing Concerns
Adding to the challenges, a majority of the Switch 2 consoles are made in China. Although a smaller portion is produced in Vietnam, it isn’t enough to completely bypass the tariff. Sony also depends heavily on Chinese production for a large part of its PlayStation 5 manufacturing.
In light of this situation, Nintendo has decided to halt pre-orders for the Switch 2 in both the U.S. and Canada. The company had initially aimed to start orders on April 9, but those intentions are now on pause with no new timeline provided.
The Switch 2 was unveiled with a price of $499, but it remains uncertain whether Nintendo will maintain that price should tariffs increase production and shipping expenses.