Nintendo, Microsoft, and Sony are right — Trump’s tariffs are foolish

Shortly after the Electronic Entertainment Expo (E3) trade show in Los Angeles earlier this month, the big-three console manufacturers sent a joint letter to United States Trade Representative Joseph Barloon. The letter requests the exclusion of video game consoles from upcoming tariffs on China. In asking for that exception, Nintendo, Microsoft, and Sony provide a detailed argument that boils down to “tariffs are foolish.”

The U.S. imported more than 96% of all consoles from China last year. The Trump administration is planning to raise its import tax on virtually every Chinese product to 25%. That means when Nintendo, Microsoft, and Sony bring a console from China into the United States, they have to write a check to the U.S. government for 25% of the cost of every unit. To be clear, China and its businesses do not pay the tariffs. They only pay if they are also the company importing to the States. In the end, American consumers pay through price increases.