U.S. President Donald Trump and Chinese President Xi Jinping are set to continue trade negotiations this week following the world figures' agreement to do so at the G20 Osaka Summit 2019. As it stands, it is unclear as to what will come of these negotiations, but Trump did delay his proposed video game tariffs on China as long as negotiations were ongoing. Now, Sony's chief financial officer Hiroki Totoki has stated a warning of a PlayStation price increase if the tariffs do go through.
For the uninitiated, Trump proposed a tariff increase from 10% to 25% on electronics such as video game consoles that are made in China a few months ago as part of the U.S-China trade war. Many took this to believe that newer consoles like Sony's PlayStation 5, Xbox's Project Scarlett, and Nintendo's Switch Lite would receive a price increase, but the tariffs could have any number of unknown consequences, including current-gen hardware. "We believe, and therefore have told the U.S. government, that higher tariffs would ultimately damage the U.S. economy," Totoki said.
Unfortunately, it seems as if the negotiations are off to a rough start. The first official sit-down to discuss trade ended with no deal or path in sight, and Trump has taken to Twitter to call out China. Trump has recently accused China of not living up to its end of the bargain by not buying American agricultural goods that it reportedly promised to, yet China denies ever making such promise.
The silver lining of the current situation is that trade talks are still ongoing, which should keep these tariffs warded off for the time being, but many manufacturers are making moves to account for the tariffs as if they were to pass nonetheless. Not only has Sony issued this warning of a price increase, stating that the consumer would likely feel the burden of said tariffs, but Nintendo has moved Switch manufacturing out of China.
Totoki's warning also follows a joint statement from Microsoft, Sony, and Nintendo in opposition to Trump's tariffs, stating that "the disproportionate harm caused by these tariffs to U.S. consumers and businesses will undermine--not advance--these goals" of protecting American IP and tech leadership. How the tariff situation plays out still remains to be seen, but hopefully, the U.S. and China can come to some type of agreement.
Source: Wall Street Journal