Over the past few months there has been a lot of buzz about tariffs. The United States and China are engaged in a trade war, and often consumers are left to pay the price. Literally. President Trump has been pushing for a 25% tax on many Chinese goods, including video game consoles. These proposed tariffs were tabled in June, but then revived just weeks later and officially signed. Most of them will go into effect on September 1, there are exceptions. A handful of products, including video game console, won’t be impacted until December 15.
Trump delays some tariffs
According to the Washington Post, the US government has decided to delay tariffs on electronic devices. This includes laptops, cell phones, video game consoles, as well as certain kinds of clothes and footwear. Trump explained that this was done so to avoid raising prices around the Christmas shopping season. Video game companies often make around 50% of their profits from Black Friday until the new year.
The impact on video game consoles
When products are hit with heavy tariffs, companies often raise their prices to compensate. Sony has already indicated that their consoles may go up in price in response. Meanwhile, Nintendo has moved some of its production away from China. Back in June, Nintendo, Sony, and Microsoft all sent a joint letter to the US government. In it, they argued that Trump’s policies would lead to the following:
• Injure consumers, video game developers, retailers, and console manufacturers;
• Put thousands of high-value, rewarding U.S. jobs at risk; and
• Stifle innovation in our industry and beyond.
The Big Three attempted to convince the government that tariffs on gaming consoles are unnecessary. They also argued that the price hikes would hurt many small businesses and delay important technological advancements. It appears they were unable to change President Trump’s mind on the issue. However, the delay means they won’t have to deal with the fallout until a few months down the road.