Sony, Nintendo and Microsoft likely breathed a sigh of collective relief this morning alongside the broader market. The Trump Administration today announced new exemptions from a list of Chinese-manufactured items scheduled to receive a 10% import tax, delaying tariffs on those items until December 15. That list includes a number of gaming-related categories, including video game consoles like the PlayStation 4, Xbox One and Nintendo Switch.
“Certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10 percent.”
“Further, as part of USTR’s public comment and hearing process, it was determined that the tariff should be delayed to December 15 for certain articles. Products in this group include, for example, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.”
While I’m not entirely sure what the national security, health or safety rationale is when it comes to video game consoles, a quick look at this list shows a range of items that are vital for the US consumer economy, predominantly manufactured in China and for which it would be monumentally difficult to move production. Sony, Microsoft, and Nintendo sent a letter to the Trump administration in June warning them about the potential impacts of tariffs on the US video game industry:
Economically, the video game industry contributes substantially to the U.S. economy, and its year-on-year growth is impressive. The U.S. video game industry generated total revenue of $36 billion in 20172 and $43.4 billion in 2018,3 reflecting over 20% in growth. This industry directly and indirectly employs more than 220,000 people. Ninety-nine point seven percent (99.7%) of video game companies qualify as small businesses and can be found in each of the fifty states; many develop software for video games across the range of platforms, from PCs to mobile, including the video game consoles that we manufacture, and are an integral part of the booming app economy.