President Trump proposes import tax on gaming consoles due to China trade war
The trade war rages on.
What you need to know
- China and the United States are currently engaged in a trade war.
- President Trump has proposed a 25 percent import tax on consoles.
- The existing import tax is only 10 percent.
- Discussions are still taking place to avoid this.
Currently, there's a trade war going on between China and the United States. Both countries keep on raising tariffs on imported goods, which means that the cost of certain items will rise by another 15 percent or more. According to a report by Nintendo Enthusiast, the "Office of the United States Trade Representative has... published the list of newly-proposed import taxes... at the behest of... President Donald Trump." Unfortunately, video game consoles are on the list.
Currently, Microsoft, Nintendo, and Sony manufacture their consoles in China. While Microsoft may have facilities in Singapore and South America, it's unclear how the company will respond to the increase. The outlet added that "all those parts will be hit with a 25 percent import tax." Considering that the import tax is only 10 percent at the moment, that's quite a hike which will eventually be paid by consumers.
Hopefully, China and the United States can resolve their trade differences soon. While the price of the Xbox One may not increase due to existing inventory, there's the possibility that next-generation machines will be a little more expensive than they should be. The Entertainment Software Association expressed disappointment and surprise when it heard the news. A spokesperson said, the "video game industry boasts a trade surplus for the American economy. Tariffs will hurt the American economy, its industries, and its consumers."
If these tariffs are passed, they could go into place by the end of June. Luckily, China and the United States are still in active discussions so there's the possibility that the trade war will be resolved by then. If not, get ready to potentially pay more for hardware down the line.
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Asher Madan handles gaming news for Windows Central. Before joining Windows Central in 2017, Asher worked for a number of different gaming outlets. He has a background in medical science and is passionate about all forms of entertainment, cooking, and antiquing.
In the US, you will be hard-pressed to find ANY company making the parts required to build electronics anymore, with all the fabrication and design having moved overseas 20 years ago. Look at the parts in your console or computer. NONE of them will say; Made in USA. They are made in China, Taiwan, Japan, Korea, Singapore, Vietnam, etc. The closest you will find are made in Guatemala or El Salvador (Intel has factories in both countries.)l
THAT is why there is no electronics manufacturing on any large scale in the USA anymore. The ENTIRE electronics supply-chain moved overseas, so the Manufacturing moved with it. Sure, there are a few Intel factories, but they are making custom ASICs, not CPU's or GPUs, or Memory in any quantity compared to their overseas factories.
WHY this all moved overseas is another issue altogether. BUT, it's gone and it's NEVER COMING BACK.
The ONLY THING that the USA still has a Global lead in is AGRICULTURE and our dimwitted President is using that for an Ego-Tariff war with China, who have now turned to Russia and Brazil for their soybeans and rice (yes, China imports vast quantities of Rice.)
This tariff war reminds me of the Blazing Saddles scene where Sheriff Bart threatens to blow his own head off if the Racist Townsfolk keep threatening to kill him (only Trump is dumb enough to actually pull the trigger.)
(I can not find a reference, but I remember Steve Jobs saying that labor cost did not prevent manufacturing iPhones in the US. In China he could go from bare ground to a functioning factory in about 9 months. In teh US he could not get zoning and clearance and building permits to start rehabilitating an existing factory in 18 months.)
Let me stop you right there, he has already showed countless times that he does not, and every economist agrees. The tariffs don't hurt China one bit, they do hurt farmers, american consumers and the US treasury though.