How would tariffs on Mexico and Canada impact the videogame industry?

boynextdoornews

I am not particularly worried about tariffs. Primarily, tariffs are only applied when importing physical goods - video games are heavily distributed digitally now. If you really still want physical media, then the proposed Mexican tariffs might affect us, if games are actually on the list of products that the tariffs apply to.

Tariffs are a tool historically used to protect domestic production of things. Imagine your local industry can only produce dinglehoppers at a cost of 1000 zeny apiece but the nation of Blargistan can produce the same dinglehoppers at 800 zeny apiece. Buying local dinglehoppers would not be economic, so local dinglehopper companies would get run out of business without government intervention. If the government imposes a tariff on imported dinglehoppers of, say, 30%, a foreign-made dinglehopper would cost 1040 zeny compared to a locally made 1000-zeny dinglehopper, thus allowing the locally made industry to compete within the country.

This gets multi-dimensional when you start introducing other nations into the mix. Blargistan isn't the only country that exports dinglehoppers - Snortugal, Humbabwe, and Flormany also sell dinglehoppers. Depending on the deals made, our nation may wish to apply a blanket dinglehopper tariff to everybody or carve out a deal with a particular country to grant favored trade status. We may wish to renegotiate these deals. The threat of tariffs are one such tool President Trump has been using to force negotiations and other things (e.g. help with the border).

I won't comment on how effective I think it is, but that's how I understand the current situation. Since tariffs are usually applied on a per-product basis I don't expect them to do much to video games as an industry since most countries don't have video games as a primary export.

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