Trump’s imposing tariffs will affect gamers even more than we thought
The PS5 Pro is already a pricey machine at $699. Now, imagine a world where it costs $1,100. Those kinds of price tags on consumer electronics could soon become a reality thanks to the incoming president Donald Trump and his proposed tariffs.
Trump is set to take office soon and “is the most beautiful word in the dictionary”. As one of his first official acts, Trump is expected to impose tariffs on imports to the US and a massive tariff on products from China. The vast majority of electronic products consumed in the US are manufactured in China. When tariffs are applied, the prices of everything gamers love will go up. And.
The Impact on Prices
The Consumer Technology Association (CTA) took advantage of its busy week organizing CES to release a report on Trump’s tariffs and the effect they will have on electronic product prices. It’s a bleak study that analyzes a worst-case scenario, but it also builds on policy proposals currently circulating in Washington, D.C.
The new CTA report delves into what Trump is expected to do and how it could change the electronics market. There are two proposals currently circulating in Washington, D.C. The first is a general tariff of 10% and an additional fixed tariff of 60% on all imports from China, which the CTA calls the “10%/70%” scenario. The second is even more severe: a general tariff of 20% on all imports and an additional 100% on anything coming from China. This terrifying scenario is the “20%/120%”.
The goal is to punish China and incentivize companies to move manufacturing to the US to avoid high tariff costs. In reality, companies will pass on the costs to the consumer. Manufacturing processes and supply chains are complex. Not everything needed to produce a PS5 Pro can be built overnight. It will take decades of construction and changes for companies to move their manufacturing out of China. In the meantime, Americans will foot the bill to offset the high tariff prices.
There are early reports that companies like Microsoft, HP, and Dell are shifting manufacturing out of China in anticipation of Trump’s presidency. NVIDIA and AMD, who have just announced new GPUs, are speeding up the shipment of as many as possible to the US before Trump. The RTX 5090 is already a $2,000 graphics card. That price, could reach $2,500 if some of Trump’s proposed tariffs are implemented.
“The proposals would increase the average US tariffs on imports from all countries, excluding China, from 1% to 21%, and on imports from China from 11% to 131%, assuming current trade levels and patterns,” the CTA report said.
Which Items Will Be Affected?
The report analyzes a list of major consumer electronic items, including laptops, video game consoles, headphones, and smartphones, and calculates how the two different scenarios would affect prices. “The proposed tariffs on just these ten products would reduce the purchasing power of US consumers by between $90 billion and $143 billion per year,” the report stated.
Laptops and video game consoles would be most affected because China is the main supplier of both and there aren’t many alternatives. “For example, in 2023, China accounted for 87% of US imports of video game consoles, 78% of smartphone imports, 79% of laptops and tablets, and two-thirds of monitor imports,” the report noted.
During his previous administration, tech lobbying groups convinced Trump to grant them an exemption from tariffs on electronic products. It’s tough to say if they’ll be able to achieve the same this time, but the news that AMD and NVIDIA are stockpiling GPUs, and the fact that major tech companies are already moving manufacturing overseas, is a grim omen.
For the CTA, all of this is a play by the US government to increase its revenue. One that will cost consumers dearly. “At its core, these proposals are tools for the US government to extract as much tax revenue as possible from Americans. We’ve seen this movie before, and we know the ending. The proposed tariffs will not create more jobs or manufacturing in the US. In fact, it may have the opposite effect, where our productivity decreases and jobs are lost over time when workers and companies have less affordable access to technology,” said Gary Shapiro, CEO of the CTA, and Ed Bryztwa, vice president of international trade at the CTA, in the report.
Trump spent a lot of taxpayer money during his presidency and increased the national debt by $8 trillion. He also cut taxes for the highest incomes. The harsh tariffs, which will hit gamers hard, will be a way for his presidency to raise revenue without passing stricter tax laws.
This article has been translated from Gizmodo US by Lucas Handley. you can find the original version.
