I'll freely admit that most of what I know about economics comes from the general manager mode of my favorite sports games. But many people smarter than me are concerned about the impacts tariffs will have on many industries. The news that Nintendo is delaying pre-orders of its much anticipated Switch 2 due to tariff uncertainty is sending shockwaves through the industry at a time when we should all be celebrating.
More than half of Nintendo's US hardware imports come from Vietnam and Cambodia. Tariffs going into effect April 9 will place a 46 percent tariff on Vietnam and a 49 percent tariff on Cambodia. Financial Times reports that thousands of Switch 2s have already been sent from Vietnam to the US in anticipation of tariffs.
On Friday, President Trump said he had a productive call with To Lam, the Communist Party of Vietnam's General Secretary, who is looking to make a deal that would cut that tariff down to zero. App Trigger will keep you posted on that and the numerous other negotiations surrounding this controversy.
Numerous experts have noted the Switch 2's $449 price tag likely factored in the current economic climate. Nintendo is headquartered in Japan, a nation targeted with a 24 percent reciprocal tariff. Trump's formula for calculating the tariffs appears to come from each nation's existing trade deficit with the United States. But it doesn't take into account that not every nation is equally good at producing every product. Many of them don't have any desire to upend a global economy that's working perfectly well for them.
Nintendo, for example, makes some of the best video games and game consoles in the world. Retailers all over the world benefit from their ingenuity and are happy to do so. Console launches are one of the best times for brick-and-mortar retailers. Customers making a $500 purchase often prefer to go to a physical location and get the item in their hand than worrying about having it delivered. Porch pirates are a thing, after all.
But the delay in pre-orders, and the confirmation it was because of tariffs, has raised important concerns. Whatever the Trump's longterm goals are here, even he has admitted there will be some pain initially. But you only get one chance to launch a new console. If there are glitches in the Switch 2 launch, the pain for several parties will be longlasting. In the case of stores such as GameStop that are already struggling mightily, the pain could be outright fatal.