The Trump administration is threatening to increase Chinese export tariffs to $300 billion, and Sony is working to find a solution. As we reported previously, Sony, Microsoft, and Nintendo worked together to write a letter to the Trump administration, opposing the tariff increase, of which is supposed to raise console costs by 25% in the United States. Now, according to a Wall Street Journal report, Sony is warning its consumers that the cost of consoles may be passed on to them if the tariffs are expanded.
“We believe, and therefore have told the U.S. government, that higher tariffs would ultimately damage the U.S. economy,” said Hiroki Totoki, Sony’s Director of Financial Holdings. Although nothing has been set in stone with this proposition, it could very well be a real issue that arises in the United States.
Because of this, companies must start considering taking the production of consoles outside of China, much like what Nintendo has done with the recent production of its Switch models that have been moved to Southeast Asia. However, Sony has not made a decision in that regard yet.
Considering how powerful the next generation PlayStation is supposed to be, its cost is something that has been on the minds of many consumers and industry professionals. But when you add a possible 25% increase on top of that, consumers will be hard-pressed to make the leap. A $500 system would then jump to $625 if the tariff proposition goes into effect.
Not only would this increase console costs, but it would also negatively impact video game developers and an estimated $840 million cost would be shifted to consumers. The opposing letter from the Sony, Nintendo, and Microsoft stated that the jobs of 200,000 Americans would be at risk if Chinese tariffs are expanded.
Since a decision is yet to be finalized, there isn’t much we can do but wait to see what happens with the proposed Chinese tariff expansion.