Console takers try to avoid 25% price bump driven by Trump's trade war
With the United States-China long-standing trade war, the Trump administration is threatening to introduce a 25% US $ 300 billion tariff into land-based goods, a move that would cover almost all Chinese exports. In light of this threat, Nintendo, Microsoft and Sony issued a letter today and asked the administration to exempt video game consoles from such tariff plans.
Seven-page letter signed by the VPs business relationship for the three major console decision makers claim that any game console import tax would "harm consumers, video game developers, resellers and console manufacturers, endanger thousands of high-quality, rewarding US jobs and stifle innovation. in our industry and beyond. " [1[ads1]9659004] Since game consoles are sold at or slightly above production costs, the cost of any import tariff will have to be sent directly to "extremely price sensitive" consumers, the letter explains. "A 25% price increase is likely to put a new game console out of the reach of many US families we expect to be in the console market this holiday season," said the letter.
The US economy every year, according to a referenced study by Trade Partners Worldwide, and "ripple effects" for third-party accessories and gaming decision makers and dealers down the line, not to mention the potential impact on the 65,000 US workers employed by the gaming industry, according to
More than 96% of US video game consoles are manufactured in China, the letter says and changes this production to another country would lead to significant supply chain disruption and … increase costs – even beyond the cost of the proposed tariffs – on products already produced under tight margin conditions. "
Console takers also argue that conso llterifs will limit types of wider technology innovations previously achieved by the console gaming industry, such as the Xbox Adaptive Controller, Wii & # 39; s motion controls and PlayStation VR.
Console manufacturers are far from alone in claiming this broad tariff threat. Hundreds of companies testified in trading this month to argue that tariffs would lead directly to price increases for US consumers who would be horrendous for businesses and the national economy as a whole. While previous rounds of Chinese tariffs had been targeted at specific industry sectors to limit the direct impact on US consumers, the new tariff tricks included almost all goods made in China, from shoes and jewelry to toys and electronics.
Discussions for a new trade agreement between China and the United States fell apart last year. The administration has made a final decision that any tariffs will come after a meeting between Trump and Chinese President Xi Jinping at the G20 summit in Osaka, Japan, later this week.
