Multiple outlets are reporting on a paper published by the Consumer Technology Association in the wake of President-elect Donald J. Trump’s proposed tariffs on foreign countries and/or foreign products.
The report claims Trump’s proposed tariffs could cause the prices of gaming consoles to rise by as much as 40%. Meanwhile, the price of a smartphone will go by up by 26%, while the price of laptops and tablets will go up 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 not China, and a 60% to 100% tariff on all imports from China. The latter would also include tariffs on digital goods, not just physical ones. For example, Black Myth: Wukong would end up costing twice as much as what it does now if you buy it in America.
The reason this would affect the prices of game consoles is because imports make up approximately 90% of video game and audio electronic equipment that gets sold to U.S. customers, according to a U.S. Bureau of Economic Analysis published in 2017.
The same report found that 88% of computers and 78% of electric appliances are imported, much of it from China or Taiwan. Imposing a 60% to 100% tariff on all imports from China would in therefore make a $500 PlayStation 5 cost $700 in the best of cases, for example, and an AAA game that costs $80 normally would now cost $112. In the worst of cases, 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 intends to follow through with his plans. When President Trump began his first term, he was quickly convinced by his economic advisers (such as Larry Kudlow) that this would be a bad idea and instead focused on much more limited tariff’s. The most drastic tariff President Trump imposed in his first term was in 2018, when 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. All of these were limited strikes (one might say) against a particular industry. A blanket 60% tariff on all products from China would have been almost unthinkable back then.
It’s still possible that these tariffs actually do happen. Larry Kudlow is not returning 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 am guessing it is more likely than not that this is one thing President Trump is convinced to pull back on, but we’ll just have to wait and see.
