In May 2019, Trump raised tariffs from 10% to 25% on Chinese made electronics imported to the U.S. This increased tariff could have led to increased prices of PS5 and Xbox Series X for the customers. Fortunately, the US-China “Phase One” agreement has put Trump’s proposed 25% tariff for video game consoles to rest.
Trump has been introducing new tariffs while increasing the existing ones since he won the elections. But last year, he raised the tariffs to 25% on $200 billion worth of Chinese goods, including consoles.
Microsoft, Sony, and Nintendo stood against Trump’s trade policy by signing a joint letter addressed to the Office of the United States Trade Representative(USTR).
The companies opposed Trump by saying that the 25% tariff would directly put the burden on American consumers. That is because the companies will be forced to increase the next-gen console prices to match the tariff cost.
A 25% hike in prices would “likely put a new video game console out of reach for many American families who we expect to be in the market for a console this holiday season,” the companies said in their letter.
US-China “Phase One” Agreement: A Win For American Consumers
Anyway, the US-China “Phase One” agreement means that the proposed tariff on video game consoles will not go forward. So, this agreement between the two enormous trade powers is a big win for American consumers who are eager to get their hands on PS5 and Xbox Series X this holiday.
The Entertainment Software Association, the trade association of the video game industry in the U.S. also applauded the signing of this accord.
The association told Polygon “We are encouraged that the Administration suspended the implementation of tariffs on video game consoles and controllers. Tariffs will erode innovation, decrease job opportunities for American workers, and increase prices for consumers.”
Even though video game consoles are out of the 25% tariff shadow, there are still other Chinese goods subjected to higher tariffs, including the tabletop games.