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Monday, October 14, 2019

The Mid-October China Tariff Cease-Fire Helps Farmers, Not Gamers

By LUDWIG VON KOOPA - I suppose gamers like eating, but...

A reminder that you should care about United States-China trade issues—a topic that there's news on—because of the August 2019 KoopaTV article about the tariffs that the Administration is waging against electronics manufactured in China, including videogame consoles.

Do understand that it's a serious enough concern that Nintendo, Sony, and Microsoft all co-wrote/signed a letter to the Office of the United States Trade Representative proclaiming that prices on consoles will go up with the tariffs in place, and it will have tremendous ripple effects on the whole gaming industry—beyond the console makers and to software developers (and indies), retailers of all sizes, accessories-makers, etc. The article gave a very temporary and contingent congratulations to President Donald John Trump for delaying those tariffs to December 15, 2019 to avoid a big negative impact on the industry in its most important quarter, the winter holidays quarter. (All the retail inventory is already accumulated by December 15, even if you're doing irresponsible Christmas Eve shopping.)

But the tariffs are still there... as negotiation leverage. That's reasoning that even the dishonest Democrats realise and will use for their own benefit even though they decry their existence. But this is a Gaming Commentary article, and not a politics rant.

Anyway, as I was saying, over the weekend there's new developments. The Wall Street Journal reports it as a “trade truce.” The stock market went up. Business Insider reports that nothing is actually written or has happened and any action is still far off, though President Donald John Trump has tweeted that this is “the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country.” He then tweeted, in old-school passionate message board posting style, “CHINA HAS ALREADY BEGUN AGRICULTURAL PURCHASES FROM OUR GREAT PATRIOT FARMERS & RANCHERS!

Notice President Donald John Trump's focus on farmers and agriculture. That would be because those December tariffs on videogame products (and many billions of dollars of other goods) are still there, though a planned tariff percentage increase scheduled for this month for other goods was put off the table. But when you consider all of the many other issues out there, like intellectual property protection and the non-tariff barriers to doing business in China (which are big barriers to the mainstream console market taking hold—to clarify, consoles are manufactured in China, but not sold in China to Chinese consumers), nothing got changed!

With regards to last week's article on China, President Donald John Trump believes the situation in Hong Kong has “de-escalated” and the trade deal is “a very positive thing for Hong Kong.” If the leader of the free world is trying to give the impression that Hong Kong is fine and dandy, how much more so do we need the likes of Activision Blizzard to selflessly use their platform to force a controversy about Hong Kong and China into the public sphere?

Now, here's a secret: If there's any deal to broadly remove tariffs, the tariffs on videogames will be included in that deal. American negotiators won't go line-by-line and keep the tariffs on videogame consoles but remove them for everything else. That's not what these are about. It's all broad-brush stuff. All the gaming executives are paying very close attention to the tariff issue, since they know it's going to have a big effect on their businesses... because of how it will impact the behaviour of you, the consumer.

Ludwig wanted to make sure the readers are educated on what's going on by following up on some earlier stories from this site. What do you rate the chances of an actual deal happening soon that prevents videogame consoles from suffering tariffs that may be passed onto consumers? Do you know any farmers who are happy about this, not including people who farm as a synonym for grinding resources in a game?

Let's not forget that some gamers are also farmers. Witch Princess knows about that.

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