Back in June 2019, Microsoft, Sony and Nintendo banded together to warn the US government against its proposed tariffs on video game consoles manufactured in China. It was estimated that rising costs would cost the games market $350 million per year, while also leading to increased pricing for consumers. Since then, trade tensions between the US and China have begun to ease off, with a number of proposed tariffs now being scrapped.
The US-China tariffs had the potential to have a major impact on the tech world, from OEMs like Apple, to PC component manufacturers and of course, game console makers. The tariffs proposed last year would have seen a 25 percent import tax on consoles, 96 percent of which are made in China. The three major console makers did scale back production in China as a precaution but they also made it clear via a joint letter that these tariffs would cause major issues for the games industry.
With the PlayStation 5, Xbox Series X and rumoured Nintendo Switch Pro supposedly coming this year, looming tariffs needed to be addressed. Fortunately, as reported by the BBC, the US and China have made some new agreements.
China has committed to increasing US imports and making it easier for US companies to take legal action against companies producing counterfeit products. In addition, some proposed tariffs, like the video game console tariffs, will be shelved indefinitely. It isn’t all good news however, as the US and China are expected to maintain some of the 25% tariffs already in place.
KitGuru Says: There is still a long way to go before the trade situation is completely resolved but for now at least, it looks like games consoles will be unaffected.