Video game industry prepares for coming of possible trade tariff

The Entertainment Software Association is in the process of formulating a plan to deal with the possibility of U.S. President Donald Trump rolling out trade tariffs, a source tells Polygon.

A tariff is essentially a form of tax that is used to make goods and services that are imported in the country more expensive to consumers than the same items made domestically.

Those possible tariffs could have an impact on the cost of game consoles and other hardware, much of which is manufactured overseas.

There were rumblings in the lead up to Trump's election that his team was floating the idea first of a five percent trade tariff, and then a possible 10 percent tariff. On Monday, Trump signed an executive order to withdraw from the Trans-Pacific Partnership. He also met with business and union leaders.

If an across-the-board trade tariff were imposed it would likely impact games and gaming consoles that are imported into the United States, like Nintendo's upcoming Switch console.

Polygon reached out to the Entertainment Software Association Monday morning to find out if the association, which represents video game developers and companies, to ask what sort of impact the association thinks the tariffs would have on the industry if they were passed. We also asked if the ESA was lobbying against the tariffs.

“We are looking into the issue and can provide more information shortly,” a spokesman told us.

CNN Money pointed out that President Trump would likely not need support from Congress to levy tariffs. He could instead use several different existing rules to do so.

While he could impost tariffs fairly quickly, experts have said any significant tariffs could lead to a trade war, with other countries imposing tariffs against U.S. products.