Retailers across the country are making drastic decisions in order to prepare for the significant impact of President Donald Trump’s tariffs.
Tariffs are taxes companies pay to import goods from overseas, and the extra cost is often passed down to consumers through price hikes.
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On April 2, Trump announced a 10% “baseline” tariff on all countries importing goods to the U.S., with roughly 60 countries seeing higher tariff rates, in an effort to wean the country off of its reliance on imported goods.
Related: Sony makes a drastic move to sell a struggling product
However, on April 9, Trump changed his mind and raised his previous 34% tariffs on China to 125%. He also paused reciprocal tariffs on all other countries for 90 days, dropping them to a universal rate of 10%.
Large retailers such as Walmart, Target, and Amazon have reportedly responded to these tariffs by quietly negotiating with their suppliers to keep prices low.
Sony makes a ‘tough decision’
However, Sony (SNEJF) , which manufactures its products in multiple countries such as Japan, China, Mexico, and Thailand, has decided to take a different approach and hike the price of its beloved PlayStation 5 console in four major regions.
Shoppers may soon be paying more for a Sony Playstation 5.
Image source: Bloomberg/Getty Images
In Europe, Sony increased the price of the PS5 Digital Edition from €449.99 to €499.99. In the U.K., the same product spiked from £389.99 to £429.99. PS5 prices in Australia and New Zealand also faced increases.
In addition, the disc drive for the PS5 also climbed in price in all four regions.
In a blog post announcing the changes, Sony said that it made the “tough decision” to increase these prices due to “a challenging economic environment, including high inflation and fluctuating exchange rates.”
Related: Nintendo makes a harsh decision amid threat of tariffs
Sony’s recent price increases for the PS5 in four different regions hint that the change may soon come to the U.S.
The move from Sony comes after it revealed in its third-quarter earnings report for 2024 that the company’s gaming sales increased by about 14% year-over-year during the quarter, contributing to a roughly 37% increase in operating profit for the segment.
Sony’s main competitor may soon make a similar move
Sony’s decision to hike PS5 prices also comes after Nintendo, one of its main competitors, made the drastic move earlier this month to delay pre-orders for its highly anticipated Nintendo Switch 2, which will be released in the U.S. on June 5 for $450. Nintendo’s decision was a direct response to Trump’s tariff announcement on April 2.
“Pre-orders for Nintendo Switch 2 in the U.S. will not start April 9 in order to assess the potential impact of tariffs and evolving market conditions,” said Nintendo in a statement.
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Nintendo of America President Doug Bowser later said in a recent interview with Wired that tariffs “weren’t factored into the pricing” of the Switch 2, hinting that the company may have to increase the product’s price.
“It’s something we’re going to have to address,” said Bowser.
Many consumers across the country are already anxious about Trump’s tariffs causing price increases and are planning to tighten their spending as a result.
According to a recent Market Pulse survey from InMoment, 56% of the survey’s respondents expect prices for goods and services to increase as a result of Trump’s tariffs.
In response to these expected price hikes, 60% of respondents said they will consider curtailing their shopping.
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