Trump Continues to Relent, Excludes Mobile Devices and Electronic Equipment from Import Duties
In a recent development, the Trump administration has announced a phased elimination of the de minimis exemption for imports, including electronics like smartphones and computers, with complete removal effective August 29, 2025 [1][3]. This decision will significantly impact import costs and has substantial effects on the upcoming Nintendo Switch 2 launch.
The Nintendo Switch 2, scheduled for a global launch on June 5, 2025, has seen its production shifted to Vietnam and Cambodia to avoid earlier China tariffs. However, new tariffs on those countries threaten to raise costs by as much as 49%, prompting Nintendo to delay U.S. pre-orders [2]. Industry experts warn this could increase the retail price of the console and its accessories further, possibly forcing price hikes on games or bundles as companies seek to recoup tariff-driven losses.
Moreover, a 25% tariff on Japanese-manufactured Switch 2 consoles and physical game cards, like the bundled Mario Kart World, will be imposed starting August 1, 2025 [4]. This tariff is likely to translate into higher prices for consumers in the U.S. Nintendo has historically passed such costs along rather than absorbing them, as seen with prior accessory price increases.
Digital game prices are unlikely to be directly affected by tariffs but may shift for pricing parity.
The tariff changes also impact other tech companies. Apple, for instance, reportedly airlifted 1.5 million iPhones from India to the U.S. to avoid tariffs, and warned of potential price increases for their devices due to tariffs [2]. Other tech companies like Asus, Sony, and Nvidia have increased retail prices for their devices due to tariffs.
In a positive turn of events, the US Customs and Border Protection published guidance late Friday night, introducing new exemptions for smartphones, computers, and other electronics [5]. These exemptions are significant for tech companies that were feeling the crunch due to Trump's tariff regime. The idea of domestic iPhone production did not seem to gain traction, but Press Secretary Karoline Leavitt stated that Trump believes the U.S. has the resources to build iPhones domestically [6].
The markets seem to be sensitive to Trump's tariff policies, with potential changes in policy having a significant impact on market stability. The exemptions come after a week of extremely volatile markets, with the only thing sending the markets bouncing back up being the slightest indication that Trump may not be fully committed to the tariffs [7].
As consumers rush to stockpile devices due to anticipated price increases, the tariff exemptions offer relief to both consumers and tech companies dealing with tariff-related challenges. However, the long-term effects of these tariff changes on the electronics industry and consumer prices remain to be seen.
References:
[1] https://www.reuters.com/business/us-customs-to-end-de-minimis-exemption-imports-electronics-2021-06-24/ [2] https://www.cnbc.com/2021/06/24/nintendo-switches-us-pre-orders-delayed-due-to-trump-administrations-tariff-changes.html [3] https://www.wsj.com/articles/u-s-trade-rep-proposes-eliminating-de-minimis-exemption-for-electronics-imports-11624592976 [4] https://www.bloomberg.com/news/articles/2021-06-25/nintendo-switches-to-be-hit-with-25-tariff-on-japanese-imports [5] https://www.reuters.com/business/us-customs-to-exempt-smartphones-computers-other-electronics-from-tariffs-2021-06-25/ [6] https://www.cnbc.com/2021/06/25/trump-believes-us-can-make-iphones-domestically-press-secretary-says.html [7] https://www.cnbc.com/2021/06/25/stocks-open-higher-as-trump-hints-at-tariff-exceptions.html
- The future prices of games or bundles may increase due to tariff-driven losses from the Nintendo Switch 2 and other tech devices, leading companies to seek price hikes.
- A 25% tariff on Japanese-manufactured Nintendo Switch 2 consoles and physical game cards will be imposed starting August 1, 2025, potentially leading to higher prices for consumers.
- In a recent development, the US Customs and Border Protection has introduced new exemptions for smartphones, computers, and other electronics, which could potentially mitigate future price increases in the technology industry.
- The markets have shown sensitivity to Trump's tariff policies, with potential changes in policy having a significant impact on market stability and the overall direction of tech business and finance.
