Nintendo responds to trade tensions between US and China

The biggest name in gaming is gearing up for what could be a political cat fight.

President Trump says he's sticking to his guns when it comes to the trade war with China, and it's having a big impact on American businesses, with many reporting slow sales in Chinese markets - and skyrocketing production costs due to tariffs on U.S. goods manufactured in China. Now a major player in the gaming world is taking steps to beat potential new tariffs. Nintendo recently confirmed the company will move production of its hugely popular Switch consoles from China to Vietnam. The company says it was a previously-planned move, geared around breaking up its production hubs so no one product is dependent on a single country.

But it comes less than a month after Nintendo joined Sony and Microsoft (makers of the Playstation and X-Box, respectively) in a letter to the Trump Administration, claiming the new tariffs proposed by President Trump would add significant costs to production, and depress sales of products and services that go along with the gaming market - a 35-billion dollar industry in the United States. The tariffs would also likely hit consoles harder than PC-based gaming, since PCs are easier to upgrade without new components.

The President has since backed off on his threat of new tariffs, citing progress made in ongoing talks with the Chinese government. But Nintendo and other gaming giants are still monitoring the situation closely.  More than 96 percent of all gaming consoles were made in China last year, and they tend to have a low profit margin; games and software generally bring in the big money for major gaming companies.

For now, the industry is taking a wait-and-see attitude, hoping further action can be avoided if President Trump gets a new trade deal with Beijing.