The United States and China have signed a new trade agreement that will see the prices of next-generation consoles, including the Xbox Series X and PlayStation 5, remain unaffected moving forward. US President Donald Trump had pushed for 25% duty on electronic goods imported by the country from China. Signed two weeks ago, the new “Phase One” deal ensures said tariffs won’t be applied to video game consoles as well as controllers.

In a statement to Polygon, the Entertainment Software Association said that they were “encouraged” by the decision. “These tariffs would have significant implications for our industry, which boasts a trade surplus for the American economy,” the ESA noted. “Tariffs will erode innovation, decrease job opportunities for American workers, and increase prices for consumers.”

That increase in prices would have likely been significant as well, making future consoles unaffordable for many American households. Last year, Sony, Microsoft, and Nintendo published a join statement highlighting this possibility to stress their opposition to Trump’s proposed tariffs.

“Video games are a core part of the fabric of American entertainment culture,” the statement read. “Two out of three households have at least one video game player and 60% of Americans play video games daily. A price increase of 25% will likely put a new video game console out of reach for many American families who we expect to be in the market for a console this holiday season.”

The same holds even greater pertinence for this year’s holidays, which have not one but two major console releases in store for expectant buyers. By virtue of their drastically upgraded innards, both Microsoft’s Series X and Sony’s PS5 look set to be more expensive than their predecessors as it is. Additional taxes would have undoubtedly dissuaded the conscious consumer and slowed down sales for both companies.

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