We all knew it was coming. Ever since the election campaign President Trump had assured us that he believed that the word “tariffs” was one of the most beautiful in the English language. But when so-called Liberation Day finally arrived on Wednesday April 2nd the whole world recoiled in shock. The markets went into freefall with billions being wiped off stock prices within hours. Countries started planning whether or not to retaliate by raising their own tariffs on American goods being imported. Economists shook their heads at a strategy that seemed as likely to harm the US as it was to boost its economy.
As markets started to fall, and even bond prices were affected, it may be that President Trump started to get cold feet. So just as soon as the bombshell had been delivered, he announced that tariffs would not come into force for most trading partners for 90 days. The exception was China who seems determined to enter into a trade war with the US. Supporters claim that this was the president’s intention all along, to use shock and awe tactics to bring countries to the negotiating table, the more sceptical felt that this was a bold gamble that spectacularly backfired. It remains to be seen if the proposed tariffs will come into force as promised/threatened. But if they do, they are certain to have an effect on the gaming industry.
How gaming stands to lose out
The Far East has long been a leading producer of components for the gaming industry. In fact, Japan can safely claim to have led the way. Other countries like South Korea are also hugely important in this area. Now they are facing tariffs of 24% and 25% respectively this is obviously going to have a knock-on effect on the price of gaming consoles when they reach the US. Sony, in particular, seems to be fearful about what this could mean for sales in one of their most lucrative markets. To compensate for this, they recently announced that the UK, European and Australasian prices of selected PlayStation models would be increasing by up to 25%.
Gamers who also prefer to have card copies of their games could also face price rises. That’s because the discs are generally produced outside of the US in countries like Mexico which has a proposed tariff rate of 25%. So those looking forward to the launch of LoL Yurana will be hoping that it won’t be released on disc fomat.
One sector that might possibly benefit from the increasing costs of gaming is the iGaming sector. That’s because, providing someone has the hardware to play on already, there’s very little connected with online casino play that is liable to be hit by tariffs. For those looking for where to play there is also plenty of choice and Casino.us ranks the best in order of games on offer and the levels of welcome bonus that the different sites offer.
The Nintendo Switch price question
This year’s only major console release may or may not have already been caught up in the tariff furore. Few were expecting the price of the new Nintendo Switch 2 to be quite as high as the quoted $450. This has been compounded by the fact that the company has delayed pre-orders in the US prior to its proposed June 5 launch date. The company may be particularly vulnerable after switching much of its production to Vietnam which has been hit by a proposed tariff rate of 46%, one of the highest in President Trump’s list. The uncertainty has certainly taken the shine off what, for many, is one of the gaming events of the year.
The ramifications for the gaming industry in general
One of President Trump’s main aims for the tariffs has been to inject money into the US economy as well as to encourage foreign companies to build factories in the country. What seems to be the most likely immediate impact is that it could depress the gaming industry as a whole. This, in turn, could spell not very good news for the 300,000 people who work in the gaming industry in the US and job losses could become a real possibility.
As to the likelihood of production shifting to the US this also seems fairly unlikely, in the short term at least. Industry specialists have suggested that it would take at least three or four years to get any kind of significant manufacturing operation up and running. So the long and the short of it seems to be that the gaming industry stands to lose out thanks to the proposed tariffs. But it’s still too early to say exactly what form they will eventually take, with plenty of observers hoping very much that President Trump will be taking a more cautious approach than his initial onslaught has suggested.
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