Trump’s tariffs bite across the globe

• The Trump administration has imposed levies on numerous countries as part of what it alleges is a “national emergency” on trade imbalances.
• The so-called reciprocal tariffs will come into force from August 7th unless countries reach and ratify a deal before then.
• The games industry and mobile market could be hit by the move, after shares of a number of companies tumbled upon the initial announcement of levies earlier this year.

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US President Donald Trump has signed an executive order instigating so-called reciprocal tariffs on more than 90 countries around the world as it seeks to rebalance what it labels as trade imbalances.

The levies were first announced earlier this year, but were subsequently delayed for most countries amid global economic turmoil. The new tariffs were announced on July 31st.

A baseline 10% of levies has been imposed on all countries, while levels vary across different regions. Taiwan has been hit with 20% tariffs, Thailand 19%, the Philippines 19%, Vietnam 20%, and India 25%.

The worst hit include Syria at 45%, Switzerland at 39% and Serbia at 35%. Mexico has negotiated a last-minute extension for negotiations, while Canada has been hit with 35% tariffs, allegedly related to the flow of fentanyl across the border with the US. Canada was not specifically mentioned in the executive order on recriprocal tariffs.

The European Union had previously negotiated a rate of 15%, the UK 10%, while the US remains in talks with China.

Countries that are locked in negotiations will be slapped with the tariffs until an alternative arrangement is reached. The reciprocal levies will come into force from August 7th.

The move is part of what the Trump administration claims is a “national emergency”, with trade imbalances alleged to threaten the country’s national security and economy.

“I have received additional information and recommendations from various senior officials on, among other things, the continued lack of reciprocity in our bilateral trade relationships and the impact of foreign trading partners’ disparate tariff rates and non-tariff barriers on US exports, the domestic manufacturing base, critical supply chains, and the defense industrial base,” read the executive order. 

Games sector impact

The latest tariffs announcement could impact the mobile market and games industry at large. Hardware manufacturers have previously used China to build their devices. Alternatives such as Vietnam and India have also been hit with levies, with the Trump administration calling for more manufacturing to take place in the US.

Companies like Apple, Microsoft, Take-Two, and Nintendo all saw share declines in April upon the initial announcement of tariffs, amongst a number of other publishers.

Earlier this year, Ampere Analysis senior research manager for games Louise Wooldridge warned of the wider impact on the games industry at the time.

“Operational costs for games or games-adjacent companies within the US may also increase,” said Wooldridge.

“Digital goods still often rely on physical infrastructure, which may become more expensive if components, servers etc. are bought out of China or other markets with high tariffs, and these greater expenses may be passed on to consumers 

“Finally there’s the broader economic impact on things like currency values and inflation, which could affect not just prices but also the spending power of consumers/gamers.”