Yesterday we reported that Sony and Microsoft, along with PC manufacturers Lenovo Acer and Asustek, and tech giants Google, Apple, and Amazon, are all making plans to shift some of their production out of China and it was thought that Nintendo had similar plans. Those plans have now been confirmed and manufacture of the Switch console will partially move to Vietnam.
The spokeswoman has said the shift was intended to “diversify risks and not to escape potential tariff hikes by the United States on products imported from China,” but the move does mean they are safe from any tariffs that are set during the Sino-U.S. trade war.
Around 40% of all the Switch consoles manufactured last year were sold in the United States and if Mr. Trump went ahead with 25% tariffs he is threatening it would add at least $50 to the price of the console.
The United States has accursed China of intellectual property theft and “requiring or pressuring foreign companies to transfer technology as a condition for securing investment or other approvals”. China has responded by saying is advancement in technological fields was the result of “huge government investment in basic science” and not theft of U.S. properties.
President Trump and President Xi Jinping agreed to a truce during the G20 Osaka summit, all existing tariffs were to remain in place but the extra tarrifs, including the one that has got all the tech companies worried, are on hold. Economists at Bank of America Merrill Lynch have said this is brief pause, “the eye of the storm”, and that the dispute between the U.S. and China is “unlikely to end anytime soon”.
“We think [the trade war] is going to be the big story of the next year, just as it was the big story of the last year,” said Ethan Harris, BoAML’s head of global economics,