Multiple outlets report on one paper published by the Consumer Technology Association in response to newly elected President Donald J. Trump’s proposed tariffs on foreign countries and/or foreign products.
The report claims that Trump’s proposed tariffs could cause gaming console prices to rise by as much as 40%. Meanwhile, the price of a smartphone will rise by 26%, while the price of laptops and tablets will rise by as much as 46%.
This analysis is based on Trump’s promise to impose a 10% to 20% tariff on imports from all countries except China, and a 60% to 100% tariff on all imports from China. The latter would also include tariffs on digital goods, not just physical goods. For example, Black Myth: Wukong would end up costing twice as much as what it costs now if you buy it in America.
The reason this would affect gaming console prices is because imports make up about 90% of video game and audio electronic equipment sold to U.S. customers, according to a study. US Bureau of Economic Analysis published in 2017.
The same report shows that 88% of computers and 78% of electrical appliances are imported, much of which comes from China or Taiwan. Thus, imposing a 60% to 100% tariff on all imports from China would cause a $500 PlayStation 5 to cost, say, $700 at best, and a AAA game that normally costs $80 would now $112 fee. In the worst case scenario, the PS5 would cost $1,000 and the game would cost $160. However, there is reason to be skeptical that the tariffs will actually happen.
Experts are reportedly skeptical that Trump plans to follow through with his plans. When President Trump began his first term, he was quickly convinced by his economic advisors (such as Larry Kudlow) that this would be a bad idea and instead focused on much more limited tariffs. The most drastic tariff imposed by President Trump during his first term had been implemented 2018when he imposed a 50% tariff on solar panels and washing machines. That same year, he also imposed a 25% tariff on steel and a 10% tariff on aluminum. These were all limited strikes (one might say) against a particular industry. A blanket tariff of 60% on all products from China would have been virtually unthinkable at the time.
It is still possible that these tariffs will actually happen. Larry Kudlow will not return to the second Trump cabinet, and most of the other faces will be new as well. However, there are also many economic libertarians who are expected to be part of Trump’s administration. For now, I suspect it’s more likely than not that this is something President Trump is convinced to backtrack on, but we’ll just have to wait and see.