The US President Donald Trump is backing down in the trade dispute with China. He wanted to impose tariffs that would also affect gaming consoles such as the PlayStation 4, Xbox One, or Nintendo Switch, and likely also the next generation of consoles, the PlayStation 5 or Xbox Scarlett.
These tariffs are about: The US government planned to impose tariffs of 25% on many products imported from China to the USA. This also includes the current generation of consoles from PlayStation 4, Xbox One, and Nintendo Switch.
Because in southern China, the huge Taiwanese company Foxconn manufactures the console. According to statements from Sony, Microsoft, and Nintendo, production cannot be shifted, as it has been built up over years with a lot of effort.
It can be assumed that Sony’s PlayStation 5 and Project Scarlett by Microsoft are also intended to be manufactured in China.
No tariffs for now while negotiations continue
This is what Trump says now: Trump announces on Twitter that he had a very good meeting with Chinese President Xi Jinping at the G20 summit in Osaka. The meeting went much better than expected. Therefore, he will not raise the tariffs now while continuing to negotiate with China:
- China has agreed to buy large quantities of agricultural products from the “great farmers” of the USA.
- Trump allows the company Huawei to buy products from its own high-tech firms as long as they do not jeopardize national security.
Trump says he cares more about a good trade than a quick one. However, existing tariffs will not be reduced.
Sony, Microsoft, and Nintendo protested
That’s why this is important: Recently, Microsoft, Sony, and Nintendo jointly submitted a request to the US Department of Commerce asking to exclude the console from the tariffs.
These tariffs threaten the entire ecosystem of the video game industry with tens of thousands of highly skilled jobs, they say. Moreover, the tariffs would not achieve anything.
It is possible that the tariffs, if they come into effect, will increase the costs for PlayStation 5 and Project Scarlett, the next Xbox, worldwide if Microsoft and Sony decide to pass on the additional costs globally.
The next generation of consoles is expected at the end of 2020 – it was said that Destiny 3 is expected to launch as a title for PlayStation 5 in November 2020. But the rumors have not been confirmed.
