About a month ago, President Donald Trump's administration proposed $300 billion in new tariffs against China as part of its on-going trade war, and this Trump tariff was set to tax video game consoles by 25%. But following Trump's meeting with Chinese President Xi Jinping at the G20 Summit, the US President announced his intent to delay said tariffs.
For context, these tariffs could have a variety of effects on the gaming industry as a whole because Microsoft, Sony, and Nintendo use manufacturers in China. These tariffs could have a negative effect on consumers, developers, retailers, manufacturers, jobs, and innovation, according to Microsoft, Sony, and Nintendo's response to the Trump tariffs.
However, because of the aforementioned meeting, it's within the realm of possibility that these tariffs are delayed indefinitely. China and the United States are now in talks concerning trade, with President Trump himself stating that he would not increase tariffs on China as long as the two countries are negotiating. Trump also stated that current tariffs would not be decreased and that he was focused on the quality, not the speed, of the transaction.
While this means that it could be some time before anything major comes of the negotiations, there should be no negative blowback on the video game industry as long as these negotiations are taking place, but the opposite side of the coin would be if negotiations fall through. It's not clear as to what would unfold, but it stands to reason that the Trump administration would once again seek these tariffs.
....amounts of agricultural product from our great Farmers. At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy product from them which will not impact our National Security. Importantly, we have opened up negotiations...— Donald J. Trump (@realDonaldTrump) June 29, 2019
....again with China as our relationship with them continues to be a very good one. The quality of the transaction is far more important to me than speed. I am in no hurry, but things look very good! There will be no reduction in the Tariffs currently being charged to China.— Donald J. Trump (@realDonaldTrump) June 29, 2019
The very threat of these tariffs alone has created small ripples in the industry. Not only did the big 3 join together for the above statement, but Nintendo has reportedly moved its two new Switch models out of China. And this is without the tariffs actually being put in place.
Hopefully, negotiations between China and the United States go well, and this tariff threat becomes no big deal. After all, with the next generation of consoles set to launch in late 2020, many would be upset about paying more for their PS5 or Xbox Project Scarlett.