At the end of a difficult week for the entire world trade and stock market, the American authorities decided to postpone the introduction of increased import duties on electronics from China, but the decision did not affect all product items. For example, Nintendo Switch 2 gaming consoles are subject to customs clearance at a rate of 145% when imported to the United States from China.
Image source: Nintendo
This is stated by Nikkei Asian Review, citing internal correspondence from one of the Asian suppliers of Apple and Nintendo. As is known, Nintendo recently canceled the start of accepting pre-orders for Switch 2 in the United States, since they were supposed to start simultaneously with the announcement of the introduction of new duties. Since the bulk of Switch 2 consoles must be manufactured in China, under the current conditions, importing them to the United States will be quite expensive, since the importer will have to pay a duty of 145%. It consists of a basic rate of 20% for all Chinese goods and an increased “retaliatory” duty of 125%. By the way, the bulk of Sony PlayStation 5 gaming consoles are also manufactured in China, so Nintendo will not be alone in its delicate position in the US market.
Some Switch 2 consoles may be manufactured in Vietnam, but the current volumes will not be enough to cover the needs of the American market. Not only gaming consoles have been excluded from the list of electronic devices that can be imported to the United States at preferential tariff rates in the next 90 days. Wireless headphones and wireless speakers from China may be subject to a duty of up to 170%, as Japanese sources explain. Chinese TVs will be imported to the United States at a duty rate of 156.4%. Over time, assembly of these goods in the required quantities can be established outside the United States, but for now, problems cannot be completely avoided.
In principle, even smartphones and laptops imported to the US will still be taxed at a rate of 20%, which is higher than the general 10%. In addition, server and telecommunications equipment of Chinese manufacture will be subject to a duty of 45% when imported to the US. A significant portion of Apple, HP, Dell, Lenovo, Acer and Asus laptops are still assembled in China. Of course, most iPhones sold in the world are also manufactured there.
Supply chains are now being impacted by changes in U.S. customs policy anyway. Contract manufacturers are accelerating the shift of electronics assembly outside of China, as the temporary 10% rate will only last for 90 days. Meanwhile, factories in India, Vietnam, and Thailand are working at full capacity to produce as much as possible for the U.S. market. The temporary relief is not giving market participants a false sense of calm.