Trump Tariffs Will Hurt Gamers More Than We Think

The PS5 Pro is an expensive machine at $699. Imagine a world where it costs $1,100. Such price hikes in consumer electronics could soon become a reality thanks to incoming President Donald Trump and his proposed tariff plans.

Trump will soon be president and he believes in the tariff “It’s the most beautiful word in the dictionary.” As one of his first official moves, Trump is expected to impose tariffs on goods imported into the United States and large tariffs on goods from China. The vast majority of electronics consumed by America are made in China. When the tariff happens, the price of everything players love will go up. And more than we first thought.

The Consumer Technology Association took time out of its busy week to cover CES new report He thinks about Trump’s tariffs and how they will affect the price of electronics. It’s a grim case study of a worst-case scenario, but it’s also based on policy proposals floating around DC right now.

A new CTA report digs deeper into what Trump will do and how it could change the electronics market. There are currently two offers around DC. The first is a 10% interest tariff and an additional fixed tariff of 60% on all imports from China, which the CTA calls the “10%/70% Scenario”. The second is tougher. The ring will be 20% on all imports and an additional 100% on anything from China. This horrible world is the “20%/120% Scenario”.

The goal is to punish China and encourage companies to move production to the United States to avoid heavy tariff costs. In effect, companies will pass the cost on to the consumer. Manufacturing and supply chains are complex. Everything you need to build a PS5 Pro can’t be built overnight. Moving companies’ manufacturing out of China will require decades of construction and change. In the meantime, Americans will pay the costs to offset the heavy tariff prices.

There are early reports that companies such as Microsoft, HP and Dell have assembly of electronic components and pushing manufacturing out of China ahead of a Trump presidency. Announcing new GPUs, NVIDIA and AMD are rushing to ship as many as possible to the US. Before Trump takes office on January 20. The RTX 5090 is already a $2000 graphics card. This price may increase 40% interestAs much as $2,500 if some of Trump’s proposed tariffs remain in place.

“The proposals would raise the average U.S. tariff on imports from all countries except China from approximately 1% to 21%, and on imports from China from 11% to 131%, based on current levels and trade patterns,” CTA the report says. he said.

The report looks at a list of major consumer electronics items, including laptops, game consoles, headphones and smartphones, and runs the numbers on what two different scenarios would do to prices. “The proposed tariffs on these ten products alone would reduce the spending power of American consumers by $90 billion annually, to $143 billion,” the report said.

Laptops and video game consoles will suffer the most, as China is the main supplier for both and there aren’t many alternatives. “For example, in 2023, China accounted for 87% of US imports of video game consoles, 78% of US smartphone imports, 79% of US laptop and tablet imports, and two-thirds of US monitor imports.” , – the report states.

During his previous administration, tech lobbyists convinced Trump to exempt them from electronics tariffs. It’s hard to know if they’ll be able to achieve the same success this time around, but the news that AMD and NVIDIA are stockpiling GPUs and the big tech companies are outsourcing their excess production is an ominous sign.

For the CTA, it’s all a game played by the US government to increase its revenue. One that will cost consumers big time. “Basically, these proposals are tools for the US government to extract as much tax revenue from the American people as possible. We’ve seen this movie before and we know the ending. The proposed tariffs will not create more jobs or manufacturing in the U.S. In fact, the opposite could happen where our productivity declines and jobs are lost over time as workers and businesses have less accessible access to technology,” said CTA CEO Gary Shapiro, and CTA- Ed Bryztwa, vice president of international trade, said in the report.

During his presidency, Trump spent a lot of taxpayer money and increased the national debt by $8 trillion. He also cut taxes on high earners. The stiff tariffs, which would hit players hard, would be a way for his presidency to raise revenue for himself without enacting tougher tax laws.