The United States and China have been locked in intense trade negotiations for many months now. The primary weapon in this trade war is tariffs on imported goods. US President Donald Trump has been considering another wave of tariffs since last year, and this would be a big one. The latest proposal would raise import taxes on nearly all Chinese goods to 25%. Unfortunately, the long list of goods impacted includes video game consoles. Video game companies are not pleased, and the ESA previously spoke out against these plans. Now, Nintendo, Sony, and Microsoft are all joining forces to do the same.
Nintendo, Sony, and Microsoft join forces
While the three major console manufacturers are rivals, they’ve all been getting pretty chummy lately. Besides, this is one issue that impacts all of them, as all three manufacture many goods in China. With this in mind, Nintendo, Sony, and Microsoft have issued a joint letter to The Office of the United States Trade Representative. The letter requests that game consoles be removed from the tariff list due to “enormous impact and undue economic harm” the tariffs will cause. Here’s an excerpt showing some of their concerns:
In particular, tariffs on video game consoles would:
• 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.
While we appreciate the Administration’s efforts to protect U.S. intellectual property and
preserve U.S. high-tech leadership, the disproportionate harm caused by these tariffs to U.S. consumers
and businesses will undermine—not advance—these goals. Accordingly, we respectfully request that the
Administration remove HTSUS subheading 9504.50.00, covering video game consoles, from the final list
of tariffs, and thus refrain from applying tariffs on these products.
Why oppose Trump’s tariffs?
According to the letter, over 96% of video game consoles imported into the US were made in China. Nintendo, Sony, and Microsoft also state that the games industry supports over 220,000 jobs, with most companies qualifying as “small businesses.” They also argue that any shift in the supply chain will significantly increase costs in a way they believe would “depress sales of video game consoles and the games and services.”
The three companies further argue that these tariffs will “hinder or delay technological innovation in a broad range of applications beyond gaming.” Nintendo, Sony, and Microsoft argue that the video game industry leads the way to many new technologies outside of gaming. They claim tariffs would reduce their R&D budgets, leading to less innovation. They highlight advancements in motion technology pioneered by Wii and Kinect, as well as HoloLens and its medical applications. Meanwhile, PlayStation 3’s Cell Processor was used to build “the most powerful supercomputer cluster in the world for disease research by simulating protein folding.”
Finally, Nintendo, Sony, and Microsoft argue that these tariffs won’t accomplish what they intend. They state that “video game consoles are not priorities in any Chinese industrial policies.” President Trump may not be specifically targeting the video game industry, but they’ll certainly be impacted if these tariffs pass. The big three see video games as being caught in the crossfire of a battle that doesn’t concern them. And they want out.