Two gamers have filed a class action lawsuit against Nintendo, alleging that the company will be unjustly enriching itself with any refund it secures from the U.S. government over widespread tariffs last year that, among other things, hiked the prices of Nintendo hardware and accessories.
“Unless restrained by this Court, Nintendo stands to recover the same tariff payments twice—once from consumers through higher prices and again from the federal government through tariff refunds, including interest paid by the government on those funds,” the suit states.
The companies paid the tarrif, they get the refund.
The fact that tariffs allowed some companies to demand more money, is related but not causal, some companies will have had to eat shit because the market wouldn’t bare the increase.
I’d love for the lawsuit to succeed and it set the precedent that when governments issue refunds they can force companies to pass it on to the customer, but I think it’s unlikely.
It’s also complicated by the way pricing works.
If the tarrif is for $15 but the uncertainty allowed a company to increase prices by $20, how much should the customer be refunded?
And what if the tarrif was $15 but the market only allowed a $10 increase and the company ate shit on the other $5?
Now what if none of these numbers are set in stone and all of the numbers are guesswork? Should the government audit all companies that changed their prices?
They should not be allowed to price based on “uncertainty” - if the tariff increases by 15, the buyer should pay that much and no more. So, anyone who bought at the increased 20 dollar price should receive 5 back.
Of course they’ll never do this.
All pricing under capitalism is based on uncertainty.
What the market will bare isn’t a known thing.
Side-note: this is why YIMBYs are dumb as fuck when they apply econ101 to rents.
That’s great in theory, but in practice these days the US sets tariffs the way rideshare companies do surge pricing.
Also what happens when the companies are forced to eat part of the tarrif, if the tarrif is 15, but that pushes the prices above the maximum profit point (units sold * per unit profit) then how much tarrif back should the customer get?
Fuck that. They should push back against the government.
Personally, I don’t think anyone should get anything back for unnecessary luxury items like video games. Food and health products? Maybe. Video games? No way. If you’re willing to pay $90 for a video game designed for five year olds, you can afford to take the hit.
They did and they got the tarrifs refunded.
The issue is that with markets nothing is tightly coupled.