President Trump announced a trade deal with Vietnam, which puts a 20% tariff on all goods originating from the country. This might seem like a good deal, especially as the latter originally had a 46% tariff before Trump paused the tariffs he put on all the U.S.’s trade partners for 90 days, dropping down the numbers to just 10%. Unfortunately, Nintendo, which manufactures the Switch 2 consoles in Vietnam, used the 10% tariff amount for its earnings forecast, according to PCMag. This means that the tariff change may throw a wrench into its plans.
The Nintendo Switch 2 launch has been relatively successful, with the company selling 3.5 million units on the opening weekend and obliterating the record of the original Switch by a full million. But despite seemingly arriving in good numbers in the U.S. and the U.K., customers from other countries have complained of shortages, with its president, Shuntaro Furukawa, apologizing to shareholders for failing to anticipate the massive demand.
One thing that the company counted on was that the tariffs for Vietnamese goods would remain at 10%. However, this is not the case, and the recent tariff increase might be too much for the company to absorb the changes. As of now, there is no finalized official document, yet, that confirms these changes, so we don’t know if and when this will take effect. Nintendo is likely holding its breath until everything is finalized before making an announcement. But if the 20% tariff is implemented, we might see the price of the Switch 2 jump from $450 to $500.
