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Console manufacturers try to avoid price collisions caused by Trump's Trade War by 25%



  All this could be 25% more expensive if the Trump Administration's latest Chinese customs threats go through.
Enlarge / All this could be 25% more expensive if the Trump's latest Chinese customs threats go by.

With the prolonged trade war between the United States and China escalating further, the Trump government is now threatening to impose a 25% tariff on additional $ 300 billion of goods from the country, a move that will also affect the US Almost all Chinese exports. Faced with this threat, Nintendo, Microsoft, and Sony today wrote a letter urging the administration to exclude video game consoles from such tariff plans.

The seven-page letter, signed by the directors of the three main console manufacturers, argued that a tax on game console imports "hurt consumers, developers, retailers and console vendors of video games, jeopardizing thousands of high-quality US jobs and hindering innovation in our industry and beyond [1

9659004] As game consoles are sold at or slightly above manufacturing costs, the cost of an import duty would have to be passed on directly to "highly price sensitive" consumers, the letter said. "A 25% price increase is likely to bring a new video game console out of reach for many American families, who we expect to be in the market for a console this Christmas," the letter said, according to a cited study by Trade Partners Worldwide, the US economy suffers a loss of $ 350 million each year, and there are "ripple effects" on accessory and game manufacturers and third-party retailers. Not to mention that, according to the letter, the 65,000 US gaming industry employees may be affected.

More than 96% of US video game consoles are manufactured in China, the letter states, and relocate this manufacturing to another country would cause "significant disruptions to the supply chain and … the cost – even beyond the cost of the proposed one Tariffs – for products that are already manufactured under conditions of tight margins. " Other technological innovations introduced in the past by the console gaming industry, such as the Xbox Adaptive Controller, Wii Motion Control, and the PlayStation VR.

Console manufacturers are far from pleading for this far-reaching tariff threat alone. Hundreds of companies said at trade hearings this month that tariffs would directly lead to price increases for US consumers, which would be terrible for businesses and the entire economy. While previous rounds of Chinese tariffs targeted certain manufacturing sectors to limit the direct impact on US consumers, the new customs threats cover virtually all Chinese-made goods, from footwear and jewelery to toys and electronics.

The trade agreement between China and the United States fell apart last month. Following a meeting between Trump and Chinese President Xi Jinping at the G20 summit in Osaka, Japan later this week, the government has announced a final decision on possible tariffs.


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