Political maelstrom: Trade wars and rivalries are shaking up games and tech
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Just last week I wrote about the potential impacts of the Trump tariffs, which you can read here.
Since then? Chaos. Global economic turmoil struck this week as uncertainty reigned over the new world trade order. As markets sank, Trump was insistent that the US hold firm. Within hours of their introduction on Wednesday, the US President hit the 90-day pause button for most countries – though still slapping them with a universal 10% levy.
The administration believes it can negotiate new deals to address what it believes are trade imbalances with over 75 countries within that time period. Good luck.
Not everyone has escaped. The trade war with China has escalated, which at the time of writing faces 125% tariffs.
While markets have bounced back somewhat, the impact of the new US administration on the games and wider tech industries is palpable.
Direct impact
Hardware manufacturers are of course in the firing line. Nintendo has delayed Switch 2 pre-orders in the US, Canada and China. Nintendo assembles its consoles in China and Vietnam – and the latter had faced a 46% rate.
Apple, meanwhile, has still lost hundreds of billions off its market cap, with fears surrounding higher priced iPhones in the US. I don’t think Apple’s taking the hit for you, folks.
As we reported in the week, tariffs have also impacted shares of a variety of games companies around the world which have seen their stock fall and rise amid the economic uncertainty. Things are calmer now, but it’s only a temporary reprieve unless the administration kicks the can down the road forever.
Global divisions
Tariffs are indicative of wider political shifts and rivalries.
TikTok, which has become a notable UA and marketing platform for games, still faces a sale or ban in the US. The deadline for a deal was extended from April 5th for another 75 days – just as companies like Amazon and AppLovin entered the fray. It’s been reported a sale is being blocked by China, unhappy over tariffs.
Should a trade war deepen, there is potential for the laws behind the TikTok divest-or-ban law to spread further. ByteDance has already had to give up US publishing rights for Moonton’s Mobile Legends to Skystone Games, which has also picked up Marvel Snap after it temporarily went offline earlier this year.
Just last year two Tencent directors were forced to resign from the board of Epic Games after the US Justice Department’s antitrust division raised concerns.
Over in the European Union, twice now it’s been reported that Apple is set to be hit with a fine for breaching Digital Markets Act rules. This was reportedly set to be announced last year, then by the end of last week. It’s also been claimed Apple could face a smaller fine due to EU fears over retaliatory action from the US, including more tariffs.
It’s been over 12 months since the European Commission opened non-compliance investigations against Apple, Meta and Alphabet. Investigations have presumably concluded, given the one-year deadline that was set has passed, but publicly, at least, we’re no clearer to a resolution on Apple’s apparent infringements. Worth noting the DMA itself is a political manifestation of how the EU seeks to address big tech monopolies, which the US isn’t as keen on.
Politics is having a profound impact on the games and wider tech industry’s future. The problem right now is it’s not completely clear how all of the above will manifest and what the fallout will be.
