President Donald Trump halted on Feb. 3 his threat to put tariffs on Canadian and Mexican goods, postponing a potential 25% tariff after meeting with each government. But a 10% tariff for all goods imported into the U.S. from China went into effect on Feb. 4, applying on top of existing tariffs for Chinese imports. So much of the gaming industry relies on China to produce its wares, from consoles, computer components, and accessories to board game and tabletop miniatures. “It’s not just that your console is going to be more expensive,” Joost van Dreunen, New York University professor and author of the Super Joost newsletter, told viraltrendingcontent in an interview. “It’s everything around it as well.”
When Trump imposed tariffs on Chinese goods in 2019, video game consoles, certain toys, and other technology were exempt. That’s not the case this time, despite a protest from the Entertainment Software Association, the main trade group that represents the game industry. “Video games are one of the most popular and beloved forms of entertainment for Americans of all ages,” the ESA said in a Feb. 3 statement. “Tariffs on video game devices and related products would negatively impact hundreds of millions of Americans and would harm the industry’s significant contributions to the U.S. economy.”
The full impact of the additional tariffs has yet to be seen; a lot of products are already in the U.S. waiting to be sold, and companies are still sorting out how they’ll be impacted. It leaves a lot of questions: Will console prices go up? What about consoles produced outside of China — but that rely on components made there? Will the tariffs impact the cost of the upcoming Nintendo Switch 2, which is currently in production? Will it hurt the already struggling video game industry?
viraltrendingcontent spoke to van Dreunen, an expert in the video game industry, as well as Washington State University economics professor Christopher Clarke to find answers.
Tariffs are essentially a federal tax on goods imported into the U.S. “When a package arrives in, say, the port of Los Angeles, Seattle, New York, Houston, or wherever, it has to go through customs,” Clarke told viraltrendingcontent. “The domestic company that brought it from abroad has to pay the government.”
Companies usually pass the cost of those taxes on to consumers via increased prices. In addition, other governments typically apply retaliatory tariffs as a response or punishment — and China already has. On Monday, the Chinese government put into effect 10%-15% tariffs on “crude oil, liquefied natural gas, farm machinery and select other products from the United States,” reports NPR, meaning that oil and machinery exported from the U.S. will cost more for Chinese importers.
“That’s going to harm our exporting businesses as well,” Clarke said. “It can have these chain effects. Now the exporter businesses aren’t having as many sales, so they can’t hire as many people, and that can harm jobs. There’s not as much income, and people can’t buy as much stuff. That’s ultimately what harms the economy.”
The Consumer Technology Association, a trade group advocating for the tech industry, put out a study in January predicting that a 60% flat-rate tariff on Chinese goods — which Trump threatened during his 2024 campaign — would cause video game console prices to jump by 40%. The tariff that went into effect this week is lower, and a CTA spokesperson told viraltrendingcontent that the organization doesn’t have updated estimates. But the gist of the study remains true: Tariffs mean that American consumers will end up paying more for video game consoles and accessories. It’s not a shift that will happen tomorrow, though: The price of an Xbox Series X isn’t going to immediately go up.
But as companies face the burden of tariffs, prices will rise, experts told viraltrendingcontent — and that can mean a poorer domestic economy in general, which never bodes well for leisure goods and cultural exports like video games.
There’s a lot of worry among consumers that Nintendo’s upcoming console, the Switch 2, will have a high price tag made even higher due to tariffs. Their impact on the new hardware is unclear, though. MST Financial analyst David Gibson wrote on X in February that the Chinese tariffs are unlikely to affect the Switch 2, since Nintendo previously moved part of its production pipeline to Vietnam — the company and electronics manufacturer Hosiden have tried to “get to 50% of production from Vietnam,” he wrote. Nintendo made the move in 2019, after threats of a previous U.S. trade war with China. Gibson posited that Nintendo could send its Vietnamese-made consoles to the U.S. to avoid tariffs against China.
Still, a lot of Nintendo Switch consoles and their components will be produced in China, Clarke said — and that will impact gamers. Trump could also extend tariffs to cover Vietnam, which would render any production relocation moot, van Dreunen said. Currently, less than 1% of video game consoles are made in the U.S., Clarke added. The CTA published a study in October 2023 that found that tariffs won’t pressure technology manufacturers into bringing production to the U.S., as Trump has repeatedly suggested.
“Completely reshoring technology manufacturing operations back to the United States is simply not practically or economically feasible given the scale and complexity of required resources and underlying economic production structure,” the study said. Instead, it’s likely that, as Nintendo did, companies will continue to diversify production operations, pushing pipelines from China into Vietnam, India, and elsewhere.
Beyond price increases for consumers, van Dreunen said game companies will likely look for ways to lower costs. “The inflation to the industry at large, over the whole of it, will continue to depress demand,” he said. “We’re already having a rough time with layoffs and low single-digit increases year over year. We’re going to continue to see that particularly as tariffs take hold.”
The chaotic implementation of it all — tariffs being threatened and then put on hold, as with Canada and Mexico, for instance — doesn’t help. Just the threat of a trade war is enough to create volatility in the market, especially in an industry that’s already struggling. As the Washington Post put it, the tariff chaos is a feature, not a bug.
“It’s a tool to create a lot of noise,” van Dreunen said. “It’s a campaign to create a lot of chaos, to obfuscate some other things. It’s not a new conversation, and it’s a very obvious political tactic. Gaming, in that sense, provides a great lens to see what the landscape looks like more clearly. I would reserve my emotional reaction and think a little deeper as to what is actually changing around us as a result.”
