Trump's New Taxes That Could Make Game Consoles More Expensive Are Delayed
Trump delays the increased taxes to avoid an impact during the holiday shopping season.
If video game consoles really are going to get more expensive in America due to Trump's tariffs, it might now take a little longer for it to happen. The United States Trade Representative announced this week that the proposed taxes on some electronics made in China, including video game consoles, is being delayed until December 15.
In a statement, the USTR said it pushed the start date back from September 1 as part of the "public comment and hearing process." This is typically understood to be a time period when members of the public and experts weigh in on a particular topic.
In this case, it appears the public comment and hearing process resulted in the committee deciding it needed extra time to make a final decision. One significant event related to video games that happened during that time was the joint letter from Microsoft, Sony, and Nintendo sent to the US government expressing their mutual opposition for the new taxes.
Other products made in China whose proposed tax increase has also been delayed to December 15 include cell phones, laptops, and computer monitors, as well as some unspecific footwear, clothing, and toys.
The USTR said it now plans to hold an "exclusion process" to determine if the products whose new tax rate have been delayed should be removed entirely from the list. The USTR said it will move quickly to release an official list into the Federal Register for items that will and will not be subject to the increased tariff rates.
Trump's new tariffs for China, which were first proposed in May, would introduce a 25% take on all imports from the country. The importers pay the tax, so that means Microsoft, Sony, and Nintendo would likely need to offset the costs with increased prices passed on to retailers and eventually consumers.
For its part, Nintendo reportedly prepared itself for the tariffs by moving manufacturing out of China ahead of the launch of rumored new Switch models.
Speaking to press today, Trump explained the delay, "We're doing this for Christmas season, just in case some of the tariffs would have an impact on US customers ..."
After Trump's announcement of the tariff delay, the US market rallied. However, stocks later fell back to Earth.
In the joint letter, Microsoft, Sony, and Nintendo pointed out that more than 96% of video game consoles imported to the US were made in China. If the console manufacturers move their production operations to the US or another country, this could cause "significant supply chain disruption" and increase costs "even beyond the cost of the proposed tariffs."
In other news, Sony recently said it might have to raise the price of PlayStation consoles if the proposed tariffs go through. The topic is especially front-of-mind currently for game consoles, as Nintendo, Microsoft, and Sony are all coming out with new hardware relatively soon. Nintendo's new Switch Lite launches in September, while Microsoft's Project Scarlett and Sony's all-but-confirmed PS5 are each expected to debut during Holiday 2020.
Xbox boss Phil Spencer has said the price of the next-generation Scarlett console may depend on what happens with the tariffs. This is an ongoing story, so keep checking back with GameSpot for the latest.
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