In April last year, Donald Trump stood in the White House’s Rose Garden and announced his “Liberation Day” tariffs, a suite of penalties to be imposed on imports from basically everywhere on Earth, including two islands inhabited entirely by penguins. The tariffs went into effect in August last year; shortly afterward, Sony announced the first increase in the cost of its PlayStation 5 consoles for US consumers since the PS5’s launch in 2020.
In February this year, the US Supreme Court ruled the Liberation Day tariffs—along with additional tariffs applied by Trump throughout 2025 via a series of executive orders—were unconstitutional. A month later, Sony announced another round of price increases. And finally, last month, the company reported that it expected to pocket around half a billion dollars in tariff refunds—which it has no plans to pass on to consumers. Those consumers, unsurprisingly, are not amused.
The Supreme Court’s decision, handed down in February, found that Trump’s tariff orders exceeded the authority granted to the President by the 1977 International Emergency Economic Powers Act to “regulate commerce during national emergencies created by foreign threats.” (What foreign threat, you ask? GREAT QUESTION.)
Since the decision, companies who paid gazillions in dollars in tariffs while the orders were in effect have been busying themselves claiming refunds, raising the question of what obligation they have—ethically and legally—to pass those funds back to their customers.
Curiously, this scenario was foreseen by, of all people, Brett Kavanaugh, the US Supreme Court’s resident answer to Ralph Wiggum. In his dissenting opinion, Kavanaugh wrote that the Federal Government “may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others.” Indeed it may, Brett. (Lest anyone mistake this for a stopped-clock moment, it should be said that Kavanaugh used this as an argument against striking down the tariffs, making his dissent a rare appearance of the “Well, yeah, the law was wrong, but the horse has bolted, so screw it” doctrine in a decision from a court whose entire remit is deciding whether the law was wrong, not whether the horse has bolted.)
Last month, during a Q&A with investors, Sony’s CFO Lin Tao disclosed the size of the refund that the company expected to receive: ¥80 billion, which equated to about $514.5 million at the date of publication. As reported by GameFile, Tao said that “most” of that money would be recouped by Sony’s gaming division, rather than being passed on to customers. That decision is being challenged by a class action lawsuit filed in California’s Northern District, which is asking Sony to partially reimburse anyone who purchased a PlayStation after last August’s price rise.
Sony was, of course, canny enough not to attribute its price increases directly to the impact of tariffs that were of questionable legality. Instead, it attributed last year’s price increase to the way that, “similar to many global businesses, [Sony] continues to navigate a challenging economic environment.” And in defending the lawsuit, Sony is choosing an, um, adventurous line of argument. “If tariffs were the cause of the price increases,” its filing states, “one would expect [PlayStation] to lower prices once the tariffs were eliminated — not raise them again. Instead, the timeline confirms that the pricing of PlayStation consoles includes a diverse and dynamic set of input costs.”
Consumers are arguing that by failing to lower prices after the elimination of tariffs, Sony is refusing to pass the savings made by the elimination of tariffs to consumers. Sony, meanwhile, is arguing that by refusing to pass on the savings made by the elimination of tariffs to consumers, it’s proving that… it is not obligated to pass on the savings made by the elimination of tariffs to consumers.
Of course, we are not lawyers, and it’d be no surprise if Sony won this case. But if anyone thinks that a big multinational company just manfully sucked up the economic cost of Donald Trump’s quixotic tariff war instead of punting that cost straight onto its customers, well, I have a bridge to sell you. God knows someone needs to invest in infrastructure.
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