The United States and China have agreed to terms on a new trade agreement that will seemingly prevent the PlayStation 5 and Xbox Series X from becoming more expensive than Sony and Microsoft intend for them to cost.
The two nations signed the Phase One agreement earlier this month, and it means that Trump’s proposed 25 percent tax on electronics made in China and shipped to the US will not go forward. The proposed tariffs might have made the new PS5 and Xbox Series X consoles more expensive due to where they are manufactured.
The Entertainment Software Association, which represents the US video game industry’s interests with lawmakers, said it feels encouraged by the signing of the accord.
“We are encouraged that the Administration suspended the implementation of tariffs on video game consoles and controllers,” a spokesperson told Polygon. “These tariffs would have significant implications for our industry, which boasts a trade surplus for the American economy. Tariffs will erode innovation, decrease job opportunities for American workers, and increase prices for consumers.”
In a rare move, Sony, Microsoft, and Nintendo released a joint statement opposing Trump’s tariffs. A 25 percent price increase in consoles to match the tariff cost would “likely put a new video game console out of reach for many American families who we expect to be in the market for a console this holiday season,” the companies said in their letter.
For its part, Nintendo was already reportedly preparing itself for the tariffs by moving manufacturing out of China for its new Switch Lite console. Nintendo is also said to be producing a Switch Pro model for release this year, but that is only a rumour for now.
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Sony told fans to expect the PS5 price to possibly increase as a result of the tariffs, while Microsoft said the price of Xbox Series X would depend on what happens with China.
While video game consoles and controllers won’t be subjected to the higher taxes, tariffs on materials made in China for tabletop games are still going forward. The executive director for the Game Manufacturers Association told Polygon that “many” raw materials needed to make tabletop games are facing the higher tariffs. The organization hopes to see these tariffs rolled back.
The PS5 and Xbox Series X are slated to launch this holiday, though pricing has yet to be confirmed. Keep checking back with GameSpot for the latest on everything you need to know about the next-generation consoles.
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