Trump's Planned Custom Duties Could Negatively Impact Gaming Enthusiasts Significantly
Trump's victory in the presidential election may bring significant changes for gamers, especially if he sticks to his proposed trade policies. America's affordability of electronics is largely due to its strong trading relationship with China.
During his campaign, Trump suggested imposing a 60% tariff on Chinese imports. If executed, this could lead to a drastic increase in the price of gamer-favorites. Laptop prices could surge by nearly 50%, while video game consoles might rise by approximately 40%, making the high-end PS5 Pro potentially cost around $1,000. The Switch 2, which might support backwards compatibility, could also come with a hefty price tag.
Campaigning on rectifying what he perceived as an imbalance in trade relations between the US and China, Trump maintained his stance on punishing China with tariffs. This was a popular move in his initial campaign and has been a recurring theme during his rallies. Trump's primary strategy involves enforcing tariffs to stimulate a resurgence of US manufacturing. A tariff is essentially a flat tax levied on traded items. Trump proposed a 10% to 20% import tax on foreign goods and a 60% tariff on goods originating from China.
Should these tariffs be enforced, the cost of doing business for importing companies will increase. In turn, they'll likely pass these extra costs onto consumers. AutoZone CEO Philip Daniele mentioned this very thing in a September earnings call, stating, "If we get tariffs, we will pass those tariff costs back to the consumer."
The Consumer Technology Association, responsible for CES, published a study in October that analyzed the potential impact of a 60% tariff on consumer electronics. Given the study's funding source (a trade organization that risks significant financial losses due to the tariff), it's a strong indicator of industry fears. The study suggested that a tariff on Chinese electronics would prompt an immediate increase in costs and a subsequent relocation of manufacturing to other countries. However, these countries will not necessarily be the US, as manufacturing costs remain prohibitively high.
The study looked at several tech products, estimating that smartphones, laptops, gaming consoles, and computer accessories would experience prominent price hikes. Laptop and tablet costs should rise by 46%, smartphone prices could increase by 26%, and video game consoles might witness a 40% uptick in price. This would make the PS5 Pro even more expensive, and high-end GPUs, used for gaming and AI, could surge from $900 to $1,300. Monitors could cost $109 more, desktops might rise by around $74, and headphones may see a price increase of $35.
Ed Brzytwa, CTA's VP of International Trade, warned of the damaging effects of tariffs in an interview with Tom's Hardware, stating, "Tariffs are regressive taxes that Americans pay. They’re not paid by foreign governments. They’re taxes that importers in the US pay, and foreign countries do not pay those tariffs. So when I say they’re regressive, it means that they harm poor people and people of little means more than they harm wealthy people."
Manufacturers might brace for Trump’s tariff promise to become reality. During his first term, he imposed taxes as high as 50% on other countries, but tech industry lobbyists successfully negotiated an exception for electronics at that time. Whether they'll be able to achieve such an exemption once more remains uncertain.
In case you were contemplating upgrading your PC, building a new one, or even purchasing a console, now might be the best time, as prices could skyrocket after January 20, 2025, if Trump's policies are enacted.
The tech industry expresses concerns about the potential impact of Trump's proposed 60% tariff on Chinese imports, predicting significant price increases for gamer-favorites such as laptops, video game consoles, and smartphones. In the future, the high-end PS5 Pro could cost around $1,000, and the Switch 2 might come with a hefty price tag due to this tech policy.
