Video game consoles will not be affected directly by the tariffs placed on Chinese imports at this time. Towards the end of 2019, a more stable decision. Here, a temporary exemption was given to the consoles. The Electronic Software Association confirmed to Polygon stating that the United States Trade Representative “has suspended the tariffs on consoles until further notice.” Game consoles excluded from tariffs could lead to several issues.
The ESA or the Electronic Software Association’s statement supports the news shared by USTR. This is regarding the first phase of a trade deal between the U.S. and China. It is part of ongoing trade negotiations between the two countries. The same statement also included the kinds of goods that had tariffs delayed from September to mid-December. This involved laptop computers, game consoles, and cell phones who have had their tariffs suspended indefinitely.
Exclusion for Tariffs
Console makers, such as Microsoft, Sony, and Nintendo have all spoken out against this issue. Not once or twice, but for several months before this happened. They had also crafted an open letter. This warned that this could potentially have a huge economic impact on the video game ecosystem and industry.
Last year, the Trump Government increased on tariffs for Chinese goods by 25 per cent. After that, the video games and electronic systems market feared that the fast-rising industry would come to a complete halt. Sometime in November last year, it came to light that China and the US have come to an agreement after rounds of negotiation.
The agreement was mainly discussed between the U.S. and the Chinese Ministry of Commerce. Here, the discussion was about the tariff towards video game consoles among other goods that will be imported from China. While it was in talks for a long time, this was only confirmed in January 2020.
ESA and USTR
Polygon received a report where the ESA stated that Office of the United States Trade Representative has confirmed the suspension of the tariffs on video game consoles. This took place just last week although negotiations surrounding this has been going for several weeks now. The USTR has decided to suspend the tariffs on consoles until further notice. This has boosted the video game industry since the tariffs could increase the trade for the American economy as well.
This decision safeguards the console manufacturers for a while. However, tabletops are not safe. Modern sets for tabletop needs specific raw materials to develop the games. This could fall under the specified tariffs on the Chinese market. While the US economy might not be as affected by this as that of the video games, it would still suffer a bit. John Stacy, the Executive Director of Game Manufacturers Association, says that efforts to execute the same exception for tabletop and other related products are underway. He says, “We are working to roll these back as well as prevent the imposition of tariffs on toys and games which was paused by the Phase One Agreement.”