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Title: How Trump's Tariffs Affect Gamers More Than We Initially Thought

Laptops and gaming consoles are set to experience the starkest price hikes. Here's why:

Title: How Trump's Tariffs Affect Gamers More Than We Initially Thought

The lavish priced PS5 Pro at $699 might soon seem like a bargain compared to potential future costs, thanks to incoming President Donald Trump and his tariff plans. Trump, who views tariffs as "the most beautiful word in the dictionary," is expected to levy these taxes on U.S. imports, including a whopping tariff on goods from China. Since a significant chunk of electronics consumed in America is manufactured in China, this move is likely to cause a spike in prices for beloved gamer gear.

NEW REPORT SHOWS ALARMING SCENARIOS

To dig deeper into this issue, the Consumer Technology Association (CTA) recently published a report. This study presents a chilling portrait of extreme scenarios should Trump's proposed tariffs materialize. Two suggestions are currently making the rounds in D.C.:

  1. The "10%/70% Scenario" - This plan includes a 10% blanket tariff and a 60% flat tariff for all imports from China.
  2. The "20%/120% Scenario" - A more stringent plan, this proposal features a 20% tariff on all imports and an additional 100% for goods coming in from China.

The goal of these tariffs is to punish China and incentivize companies to move their manufacturing facilities to the U.S. to avoid costly tariff penalties. However, the reality is that businesses will simply pass these added expenses on to the consumers. Changing an entire manufacturing landscape takes time, and the average American will bear the burden in the interim.

COMPANIES BEGINNING TO ADJUST

Some tech giants are already taking measures to prepare for this tariff-filled future. Companies like Microsoft, HP, and Dell are stockpiling electronic components and shifting manufacturing operations outside of China in anticipation of the Trump presidency.

Meanwhile, NVIDIA and AMD, which recently released new GPUs, are making a mad dash to ship these products to the U.S. ahead of Trump's inauguration on January 20. The high-priced RTX 5090 graphics card is expected to see a further price increase of up to 40%, skyrocketing to as much as $2,500, should Trump implement some of his mentioned tariffs.

RISK TO CONSUMER SPENDING POWER

According to the report, the combined tariffs on ten product categories, including laptops, smartphones, and video game consoles, could cut American consumers' spending power by a colossal $90 billion to $143 billion per year.

Game consoles, laptops, and smartphones will be among the most affected sectors with price rises of up to 45%. Infact, China is the primary supplier for 87% of video game consoles, 78% of smartphones, and two-thirds of monitors imported into the U.S. In a worst-case scenario, these tariffs may cause jobs to be lost and increase the complexity of supply chain and logistics, further impacting e-commerce companies' productivity.

TECH LOBBYISTS FACE AN UPHEAVAL

During his first term, Donald Trump granted tech lobbyists exemptions from tariffs on electronics. Whether they can accomplish the same feat a second time remains to be seen, but the news that AMD and NVIDIA are stockpiling GPUs and big tech companies like Microsoft, HP, and Dell are moving manufacturing outside of China, paints a grim picture.

As per the CTA, this US government action is primarily aimed at maximizing revenue at the expense of consumers. The tariffs would not stimulate jobs or manufacturing in the U.S., but rather decrease productivity and potentially lead to job losses in the long term.

In light of the potential tariff scenarios, the cost of beloved tech products like gaming GPUs might surge significantly. For instance, the high-end RTX 5090 graphics card could see a price increase of up to 40%, reaching as high as $2,500.

Should these tariffs be implemented, the tech industry might face a significant impact, potentially causing a substantial decrease in American consumers' spending power on tech goods. The report suggests that the tariffs on ten product categories, including video game consoles, smartphones, and laptops, could collectively reduce consumers' spending power by an alarming $90 billion to $143 billion annually.

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