The escalating trade war between Donald Trump’s ego and Chinese manufacturing is heating up once again. and now, buried deep in the lists of thousands of product types, is a series of products that could cripple the games and tabletop industries and have major impact on console pricing in the next console generation.
The US administration already levied targeted tariffs against many different products over the course of the last couple of years. Agricultural products and manufacturing raw resources like Soy beans and various metals have already been hit with these penalties for imports and exports.
GPU manufacturers AMD and Nvidia were already subject to some of these fees being levied on their products when other tariffs hit computer parts and similar products. That targeting is now apparently being expanded to game consoles, coin-operated arcade machines and repair parts, as well as some accessories manufactured outside the US.
And it’s not just video games in the crosshairs this time around. One section in the proposal is section 9504.90.60, which covers “chess, checkers, backgammon, darts and table and parlor games played on boards of a special design and parts thereof; poker chips and dice.” has the potential to completely destroy the tabletop industry pricing model as it currently exists.
White Wizard Games chief operating officer Debbie Moynihan said that these tariffs would force many products to be routed to regional hubs to avoid US tariffs, causing prices to rise 5% to 10% across the industry. Retailers, especially smaller shops, would really feel this shift. The margins for many of these smaller local shops are already razor thin, and online retailers would further push them out of the market in terms of competitive pricing should these tariffs hit board games.
Trump and his cronies believe that these heavy-handed regulations are a driving force behind domestic manufacturing and economic growth in the US, industry insiders and experts disagree.
“Tariffs will drive prices up, quality down, or more likely both,” said Matt Aiken, co-owner and CFO of Keymaster Games. “It might come in the form of increased shipping costs—something Europeans and other countries already deal with—or transparent tariff fees. The cost for shipping to places like Switzerland is already 2x those prices and get passed on to the consumers. It will also come from publishers having to find new manufactures who will need to hire new talent to meet demand. And ultimately, the quality coming out of China is, in some cases, better than other countries, including the US.”
I sincerely doubt that Sony and Microsoft divisions in the US will take this lying down though. Even though game consoles are often sold as loss-leaders to lower prices for consumers, a 25% increase in losses could be unsustainable. Losing millions or even billions of dollars over the lifetime of a new console like the PS5 or new Xbox would cripple their first-party support as the companies would inevitably shift resources around to compensate.
The hearing for these proposed tariffs are scheduled to begin on June 17, and it is possible that they could go into effect as early as June 24. And we’re likely to see a significant amount of behind-the-scenes pressure and public opposition to yet more tariffs, not just for video games either. This because the volume of proposed tariffs encompasses so much of the trade of imported Chinese goods, around $540 billion, that virtually all goods imported from China to the U.S. would face some sort of tariff.
And as US markets continue to decline, for the fifth week in a row, traders and companies alike are not optimistic about a trade deal that would reduce pressure on consumers anytime soon.