In the past eight years, the Nintendo Switch has sold about 150 million units around the world. The Switch 2, which is due out on June 5, had its pre-order date in America (and Canada) postponed due to Trump’s tariffs, as Nintendo tries to figure out what to do.
According to The Wall Street Journal, last year 60% of Nintendo hardware that went into America originated from China. While President Trump has put most countries’ tariffs at 10% for 90 days, he’s pushed China’s rates to 145%. Previously there has been a “de minimis exception” for items coming into the U.S. that cost $800 or less, but President Trump has that exception ending in May.
It appears that, expecting tariffs, Nintendo switched (no pun intended) work over into Vietnam. In March, 70% of Nintendo products going into America came from Vietnam, and that number jumped even higher, at 90% in the beginning of April. But now Vietnam is supposed to get a 46% tariff rate after 90 days. Nintendo also has some things made in Cambodia, which will be hit by a 49% tariff rate.
Using math done by Australia-based financial-services firm MST Financial, the WSJ says that means that any Nintendo products coming from Vietnam during the 10% rate for 90 days will cost the company about an extra $34. If the 46% tariff rate goes back into effect in 90 days, then Nintendo will have to give an extra $155 for each Switch 2 unit. Either Nintendo will have to take that loss, or consumers will have a more-expensive Switch 2.
Nintendo could shift some of its manufacturing to different nations, but with the tariff laws sometimes altering by the day or even hour, they could move to a country that ends up being hit by even bigger tariffs.
President Trump has said he’s doing these tariffs to bring more business into America. The Wall Street Journal wrote, “As with Apple’s iPhone, the Switch 2’s components can only be sourced from a select few countries—displays from Japan, microchips from Taiwan. And there’s no credible scenario where every single component is built in North America, even if import tariffs were 1,000%.”
Source: Wall Street Journal
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Danica Davidson is the author of the bestselling Manga Art for Beginners with artist Melanie Westin, plus its sequel, Manga Art for Everyone, and the first-of-its-kind manga chalk book Chalk Art Manga, both illustrated by professional Japanese mangaka Rena Saiya. Check out her other comics and books at www.danicadavidson.com.