The video game industry might just be the victim of the “tariff war” between the United States and China. The two nations have been involved for quite some time in intense trade negotiations. Both sides have attempted to get the upper hand by raising tariffs on the other, and the situation is still escalating. As such, the video game industry would definitely take a hit at some point.
The Office of the United States Trade Representative has published the list of new tax proposals for the importation of the products in the American territory, prepared by the Trump administration. The list reveals something that might negatively impact the gaming industry as a whole: A 25% tax on video game consoles.
The reason behind this tax happens when you look at the places where consoles are manufactured from: China. Nintendo, Microsoft, and Sony all manufacture many of their products in Chinese plants. If these new tariffs pass, all of those parts will be hit with a 25% import tax. This comes as a steep increase to the current 10% tax.
In other words, gamers will find Console gaming more expensive than ever before. In other words, console prices will rise. The Entertainment Software Association has intervened expressing its disapproval against the proposed measure. “The games industry has a trade surplus for the american economy. The tariffs hurt the american economy, its industries and its consumers,” writes the ESA in its press release.
What’s most alarming about the new tariff proposition is that the plans may be made official next month. The beginning of the public hearings is scheduled for the 17th of June, immediately after the conclusion of the E3 2019. Depending on the outcome of the debate, we could see this tax being put in place as early as June 24. What could this mean for the PS5 and the next Xbox? Only time will tell.
Source – Nintendo Enthusiast
As long as they don’t release any new consoles before Trump gets impeached then we’ll be ok.
Lol
Well next year his last year of this term. Not sure if he’ll get re elected, especially since it seems like come this election there will be plenty of other choices
The new systems are not coming out this year…. this means nothing at all. Assuming this person paid attention in economics class, tariffs do not impact products that have not launched, and what this article is doing is speculating on the impact of a tariff…. but with the nature of tariffs, every product has the chance to be effected by tariffs, because tariffs are a tool that countries use… but rarely do geopolitics erode enough where retaliatory tariffs last over a year, or even months.
> rarely do geopolitics erode enough where retaliatory tariffs last over a year, or even months.
The first of Trump’s tariff’s were implemented in January 2018 (Solar Panels, Washing Machines, etc…), and the second happened in March 2018 (Steel, Aluminum). On June 1, 2018 this 2nd was extended to the EU, Canada, and Mexico (lifted in May 2019, for Canada and Mexico).
Your “rarely” has already done long passed.
The statement about not impacting unlaunched products stands. But that they “rarely […] last over a year, or even months” is just false in this case.