>Will it be more difficult to sell software or SaaS across the border between Canada and the US?
That's one intended outcome.
OTOH, people in both countries may be financially hosed bad enough, that way more people will never be able to afford things other than bare necessities for the rest of their lives anyway.
Sudden tariff on stable trade agreement that has been tweaked to ensure both side won is not fear mongering.
Fear mongering is what Trump does to Americans: take out Oil, the thing that Americans have never ending hunger for because US infra and public transport suck ass, then the trade between US and Canada is on par.
Fear mongering is 19kg of fentanyl (or less than 1% of US fentanyl) moving from Canada to US while fentanyl by and large is US problem.
Just to inject some sanity into this discussion, these tariffs would not even bring the US to the level of some higher-tariff countries such as the notoriously impoverished United Kingdom or South Korea. 2022 tariff revenue was about 100B and the current Trump tariffs as of today stand around 90B/year depending who you ask, so this takes us to, very roughly, a weighted mean of 2.8%.
Of course total revenue will decrease. Possibly very significantly so only a fraction of that estimated will be collected.
> a weighted mean of 2.8%.
Can you explain where are you getting that? I'm not saying it's false but ~45% of all use imports come from China, Canada and Mexico. If they are all taxes at 10%/25% the mean would be significantly above 2.8%?
Are you aware that the US did this before (weighted mean tariffs >doubled in Trump’s first term) and it worked well enough that the Biden administration kept the tariffs and even increased some?
You may want to take a look at a graph of US imports by year or tariff revenue by year to see your “very significant” decrease in revenue (hint: it kept going up…) I don’t claim that it is entirely independent of tariff rates forever, but it is certainly nowhere near as dependent as people imagine.
>Can you explain where are you getting that?
Sure, there are various organizations that study US tax policy and they generally publish estimates of revenue generated by a proposed tariff. I took a look at a few and found estimates around 90-100B first year. The reason that it’s not simple to calculate these tariffs is because tariff law is complex and real world behavior shifts. With the last Trump tariffs there was a huge shift out of China for several industries. Companies also lie about the value of things: https://www.federalreserve.gov/econres/notes/feds-notes/did-...
No because it wasn't even remotely the same. In 2022 the average tariff on Chinese imports was 2.86%, 0.01% on Mexican goods and 0.12% on Canadian goods.
Besides that the first term tariffs were targeted and not applied universally to all imports. That "great/fantastic deal"(USMCA) that Trump "negotiated" back in his first term kept most trade with Mexico and Canada more or less tariff free.
TBH it's hard to tell if you're being purposefully obtuse or not...
> The reason that it’s not simple to calculate
Yes and while I very well might be wrong I just don't see how is the 2.8% figure arithmetically possible.
had different calculations (of course it assumes 60% on China and 10% on all other countries besides Mexico/Canada so it would be well below 21% but not 2.8% either).
I think everyone can agree that in both 2018 and 2025: 1) Donald Trump announced sweeping tariffs on major trade partners - among which China, Mexico and Canada; 2) most media predicted a large-scale disaster; 3) large parts of the tariffs were later cancelled entirely, delayed, or scaled back.
I'm not sure what part of that "isn't even remotely the same." You highlight the low average tariff rates by country despite the (large) first Trump tariffs. This is _exactly_ my point: when you account for all exemptions, changes, agreements, rerouting of trade etc, the marquee double-digit numbers shrink dramatically.
---
As for the exact number, obviously it is impossible to know, and there are many ways to measure it. It's not uncommon for two estimates of tariff revenue, both calculated in honest ways, to be widely at odds. This is one reason why I qualified my numbers as "very rough", but I did lay out my reasoning above. To make it simple: most groups (CRFB, Tax Foundation, etc) estimated the tariffs we were discussing (China +10, Canada/Mexico +25) to sit - very roughly - at 100B of revenue raised plus or minus a few tens of billions. Current US tariff revenue is approximately 100B. So, in other words, we're talking about an approximate doubling of mean tariffs, which stand at around 1.5-2% today depending on who you ask and how it is measured.
… I mean, that’s really hardly the point. “Hey, car industry, it’s totally fine _in aggregate_, so you really shouldn’t be complaining about collapsing”.
High tariff countries have economies configured around those tariffs. You can’t do that overnight (as the UK is discovering post-Brexit).
Are you aware that the US did this before (weighted mean tariffs >doubled in Trump’s first term) and it worked well enough that the Biden administration kept the tariffs and even increased some?
Also, comparing this to Brexit is absurd. Even putting aside the minor difference between Brexit and tariff changes, let’s compare a small island completely dependent on its neighbors to the US. They could not be more different! UK exports/imports as a percentage of GDP are double to triple the US.
Of course they will affect Software or SAAS. We don't know how yet since retaliation tariffs have not all been finalised/levied yet. Remember tariffs are not just unilateral from the US.
Tariffs on physical goods can be enforced during physical movement, e.g. a shipment crossing a border. Cross-border taxation of digital services is more complex. Canada introduced a unilateral DST (Digital Services Tax) in 2024, which the US is challenging under USMCA, https://www.canada.ca/en/services/taxes/excise-taxes-duties-...
> DIGITAL SERVICES: While traditional industries face direct tariff impacts, digital services are also encountering challenges. Many Canadian tech firms provide software, consulting, and cloud-based solutions to U.S. clients. The uncertainty surrounding trade relations has led some American companies to reconsider long-term contracts with Canadian providers. Additionally, potential retaliatory measures from Canada could further complicate cross-border data exchange and intellectual property regulations. Despite these concerns, digital businesses may still have an advantage due to their ability to operate remotely and pivot towards new markets with relative ease.
lol, this is just "paper" justification just like the whole Military plane debacle with LatAm countries.
Eventually Colombia still reject Military plane deporting immigrants, just like how Mexico said "Fuck you" when Trump sent military plane (this didn't make a huge news in the US)
Funny now that Mexico and Canada has come to the table the "end of the world" tariff's has been given a 30 day extension while they negotiate a better border agreement. This has always been about Canada and Mexico getting the better end of the deal Bill Clinton gave them, why would they negotiate until there forced to?
China is a different story I suspect the 35% tariff (25% Biden, 10% Trump) will stick.
There’s no going back to normal after this. Even if Trump called off the tariffs right now, the damage to international relations has already been done.
Yep at all levels. Chinese businesses planning their next 5 years may want to diversify away from US customers. US people voted for unhinged presidents is the clear message.
This is my understanding as well. Suddenly, China as main partner doesn't look that bad for a lot of countries right now. The era of US seen as the champion of the free world is over. Not that surprising since Trump always said he will put USA First, but the way he's implementing is really unbelievably stupid.
He can only enact these tariffs because he declared a national emergency. Otherwise he'd need the congress to confirm them. The illegal immigrants/fentanyl pretext seems absurd and flimsy...
I do hope this is sarcasm? It's more than obvious that this was just a pretext since US government was not able to clearly formulate any specific coherent demands that they had from Canada.
> sane leadership
Well clearly sane people seem to have issues communicating or comprehended the current US government. So maybe the opposite would work better?
Anyway.. If anyone can save the Liberal party in Canada from defeat it's probably Trump (by antagonizing Canadians to such a degree that they would vote for anyone opposed to him).
That's only the paper justification. Trump needed to claim an emergency to allow him to impose these without involving Congress and repealing the USMCA.
I thought conservatives thought that the drug problem was because people stopped going to church, lack of personal responsibility and “absentee fathers”?
Or is the causation different now because it is affecting “rural America” and not the “inner city”?
Tariffs are not extortion; they are lawful taxes on imported goods. Every country can levy tariffs on any other country; they aren't unique to the US. Your personal feelings about Donald Trump don't change these facts.
The hyperbole on HN has been ridiculous lately. Get it together, folks. The US doesn't owe any other country cheap prices and the US also reserves the right to raise income in any lawful manner.
Except the way Trump imposed clearly seemed like an attempt at exhortation.
Of course those demands to Canada and Mexico were so absurd and vague that they turned out to just be a pretext.
Trump can't enact these tariffs legally without the approval from congress unless they are related to some national [economic] emergency.
So he came up with the fentanyl from Canada nonsense to somehow workaround that. Hopefully they will be challenged in court and the congress will refuse to confirm them.
He basically used the same mechanism used by presidents to impose sanctions on Russia and other countries to introduce tariffs on American allies...
Trump's tariff on the other hand doesn't have justification. He uses Drugs as an excuse to get his tariff unchallenged.
Trump also wants to use revenue Tariff to cover the tax revenue deficit for his proposed Tax Cut that only benefits the Rich people and he's selling Tariff as "tax on foreign countries" where in reality American consumers are the ones footing the bill, not the Corporate who pass the cost.
Go out and ask what Americans know about Tariff prior to this debacle and check how many articles, short videos were published to explain what or how Tariff works. It's pretty clear Americans don't understand how it works and Trump eloquently attempts to misled these folks.
Now having said that... Let's get to the details:
If you take out Oil from Canada-US trade agreement, both nations are on-par (yep, White House didn't tell you that)
You know how much Fentanyl goes across the border from Canada side? 19kg, you (yes you) can carry it in a military grade backpack probably. Fentanyl is US problems.
Trump is building a narrative to justify stealing US taxpayer money and shift it to the Billionaires.
> American consumers are the ones footing the bill, not the Corporate who pass the cost
I see this a lot. Obviously, the idea is to create market space for local companies to compete in with a clear advantage.
I think India before 1990s used to have nearly 200% tariffs (I am not entirely sure on the numbers, but it was absurdly high). This did not fare well for India because quality products made in countries like US and Japan were incredibly expensive. Some companies got around this by forming alliances with local companies leading to companies like (Maruti-Suzuki, Hero-Honda, Mahindra-Ford, etc.)
But US seems to me in a position where they can impose tariffs on some competing countries and reasonably expect their local market to occupy the space created
Not any kind of expert, but from my research, Article 19.3 of the USMCA says that tariffs can't be imposed on digital products:
1. No Party shall impose customs duties, fees, or other charges on or in connection with the importation or exportation of digital products transmitted electronically, between a person of one Party and a person of another Party.
The USMCA is irrelevant. Almost everything hit by the tariffs is not allowed under USMCA. Trump has claimed an "emergency" to bypass Congress and the USMCA.
You act as if this administration is concerned with silly things like laws or that either the courts or Congress is going to stop him.
This isn’t hyperbole. Right now, Oracle and Akamai is illegally supporting TikTok even though a bipartisan law was passed and it was upheld by the conservative court because Trump said it was okay.
Well usually it's levied at the border for physical goods so the importing company (usually not the end consumer for consumer goods) eats the cost (or prices it in/passes it to the consumer).
You're right though, with digital goods it's ambiguous. If the company has a US entity is that the importer? That's the scenario that popped into my (somewhat tired) head. Probably because Canada has been trying to impose taxes on US tech companies with a similar argument.
If you buy a good online in a separate country, where is the transaction made?
51 comments
[ 4.5 ms ] story [ 106 ms ] threadThat's one intended outcome.
OTOH, people in both countries may be financially hosed bad enough, that way more people will never be able to afford things other than bare necessities for the rest of their lives anyway.
Fear mongering is what Trump does to Americans: take out Oil, the thing that Americans have never ending hunger for because US infra and public transport suck ass, then the trade between US and Canada is on par.
Fear mongering is 19kg of fentanyl (or less than 1% of US fentanyl) moving from Canada to US while fentanyl by and large is US problem.
Just to inject some sanity into this discussion, these tariffs would not even bring the US to the level of some higher-tariff countries such as the notoriously impoverished United Kingdom or South Korea. 2022 tariff revenue was about 100B and the current Trump tariffs as of today stand around 90B/year depending who you ask, so this takes us to, very roughly, a weighted mean of 2.8%.
Tariff rate, applied, weighted mean, all products (%): https://data.worldbank.org/indicator/TM.TAX.MRCH.WM.AR.ZS?ty...
Some countries for reference:
India: 11.5%
South Korea: 8.6%
Mexico: 4.8%
China: 3.1%
UK: 3.1%
Israel: 2.8%
Norway: 2.3%
New Zealand: 1.7%
US: 1.5%
Canada: 1.4%
EU: 1.3%
Australia: 1.0%
Of course total revenue will decrease. Possibly very significantly so only a fraction of that estimated will be collected.
> a weighted mean of 2.8%.
Can you explain where are you getting that? I'm not saying it's false but ~45% of all use imports come from China, Canada and Mexico. If they are all taxes at 10%/25% the mean would be significantly above 2.8%?
You may want to take a look at a graph of US imports by year or tariff revenue by year to see your “very significant” decrease in revenue (hint: it kept going up…) I don’t claim that it is entirely independent of tariff rates forever, but it is certainly nowhere near as dependent as people imagine.
>Can you explain where are you getting that?
Sure, there are various organizations that study US tax policy and they generally publish estimates of revenue generated by a proposed tariff. I took a look at a few and found estimates around 90-100B first year. The reason that it’s not simple to calculate these tariffs is because tariff law is complex and real world behavior shifts. With the last Trump tariffs there was a huge shift out of China for several industries. Companies also lie about the value of things: https://www.federalreserve.gov/econres/notes/feds-notes/did-...
No because it wasn't even remotely the same. In 2022 the average tariff on Chinese imports was 2.86%, 0.01% on Mexican goods and 0.12% on Canadian goods.
Besides that the first term tariffs were targeted and not applied universally to all imports. That "great/fantastic deal"(USMCA) that Trump "negotiated" back in his first term kept most trade with Mexico and Canada more or less tariff free.
TBH it's hard to tell if you're being purposefully obtuse or not...
> The reason that it’s not simple to calculate
Yes and while I very well might be wrong I just don't see how is the 2.8% figure arithmetically possible.
e.g. https://www.fitchratings.com/research/structured-finance/eff...
had different calculations (of course it assumes 60% on China and 10% on all other countries besides Mexico/Canada so it would be well below 21% but not 2.8% either).
I think everyone can agree that in both 2018 and 2025: 1) Donald Trump announced sweeping tariffs on major trade partners - among which China, Mexico and Canada; 2) most media predicted a large-scale disaster; 3) large parts of the tariffs were later cancelled entirely, delayed, or scaled back.
I'm not sure what part of that "isn't even remotely the same." You highlight the low average tariff rates by country despite the (large) first Trump tariffs. This is _exactly_ my point: when you account for all exemptions, changes, agreements, rerouting of trade etc, the marquee double-digit numbers shrink dramatically.
---
As for the exact number, obviously it is impossible to know, and there are many ways to measure it. It's not uncommon for two estimates of tariff revenue, both calculated in honest ways, to be widely at odds. This is one reason why I qualified my numbers as "very rough", but I did lay out my reasoning above. To make it simple: most groups (CRFB, Tax Foundation, etc) estimated the tariffs we were discussing (China +10, Canada/Mexico +25) to sit - very roughly - at 100B of revenue raised plus or minus a few tens of billions. Current US tariff revenue is approximately 100B. So, in other words, we're talking about an approximate doubling of mean tariffs, which stand at around 1.5-2% today depending on who you ask and how it is measured.
High tariff countries have economies configured around those tariffs. You can’t do that overnight (as the UK is discovering post-Brexit).
Also, comparing this to Brexit is absurd. Even putting aside the minor difference between Brexit and tariff changes, let’s compare a small island completely dependent on its neighbors to the US. They could not be more different! UK exports/imports as a percentage of GDP are double to triple the US.
Average sucks.
This article claims that digital services are not subject to direct US tariffs, https://www.codemastersinc.com/post/impact-of-u-s-tariffs-on...
> DIGITAL SERVICES: While traditional industries face direct tariff impacts, digital services are also encountering challenges. Many Canadian tech firms provide software, consulting, and cloud-based solutions to U.S. clients. The uncertainty surrounding trade relations has led some American companies to reconsider long-term contracts with Canadian providers. Additionally, potential retaliatory measures from Canada could further complicate cross-border data exchange and intellectual property regulations. Despite these concerns, digital businesses may still have an advantage due to their ability to operate remotely and pivot towards new markets with relative ease.
[1]: https://www.ctvnews.ca/world/trumps-tariffs/article/nothing-...
Eventually Colombia still reject Military plane deporting immigrants, just like how Mexico said "Fuck you" when Trump sent military plane (this didn't make a huge news in the US)
China is a different story I suspect the 35% tariff (25% Biden, 10% Trump) will stick.
I hope Europe hears the wake up all.
Trump is not famous for admitting he is wrong. Plus he's probably not wrong in this case, if destabilizing the US has been the goal all along.
He can only enact these tariffs because he declared a national emergency. Otherwise he'd need the congress to confirm them. The illegal immigrants/fentanyl pretext seems absurd and flimsy...
I do hope this is sarcasm? It's more than obvious that this was just a pretext since US government was not able to clearly formulate any specific coherent demands that they had from Canada.
> sane leadership
Well clearly sane people seem to have issues communicating or comprehended the current US government. So maybe the opposite would work better?
Anyway.. If anyone can save the Liberal party in Canada from defeat it's probably Trump (by antagonizing Canadians to such a degree that they would vote for anyone opposed to him).
Or is the causation different now because it is affecting “rural America” and not the “inner city”?
What ever happened to “personal responsibility”, “not blaming others for your position in life” and “pulling yourself up by your bootstraps”?
This is about Trump wanting to replace the deficit from him fleecing US tax revenue to be distributed to the billionaires as Tax Cut.
He needs to replenish some from another source: Tariff, which is a form of tax for stupid voters.
He already said it that there's nothing Canada can do during meeting between Officials.
The hyperbole on HN has been ridiculous lately. Get it together, folks. The US doesn't owe any other country cheap prices and the US also reserves the right to raise income in any lawful manner.
Except the way Trump imposed clearly seemed like an attempt at exhortation.
Of course those demands to Canada and Mexico were so absurd and vague that they turned out to just be a pretext.
Trump can't enact these tariffs legally without the approval from congress unless they are related to some national [economic] emergency.
So he came up with the fentanyl from Canada nonsense to somehow workaround that. Hopefully they will be challenged in court and the congress will refuse to confirm them.
He basically used the same mechanism used by presidents to impose sanctions on Russia and other countries to introduce tariffs on American allies...
Trump's tariff on the other hand doesn't have justification. He uses Drugs as an excuse to get his tariff unchallenged.
Trump also wants to use revenue Tariff to cover the tax revenue deficit for his proposed Tax Cut that only benefits the Rich people and he's selling Tariff as "tax on foreign countries" where in reality American consumers are the ones footing the bill, not the Corporate who pass the cost.
Go out and ask what Americans know about Tariff prior to this debacle and check how many articles, short videos were published to explain what or how Tariff works. It's pretty clear Americans don't understand how it works and Trump eloquently attempts to misled these folks.
Now having said that... Let's get to the details:
If you take out Oil from Canada-US trade agreement, both nations are on-par (yep, White House didn't tell you that)
You know how much Fentanyl goes across the border from Canada side? 19kg, you (yes you) can carry it in a military grade backpack probably. Fentanyl is US problems.
Trump is building a narrative to justify stealing US taxpayer money and shift it to the Billionaires.
I see this a lot. Obviously, the idea is to create market space for local companies to compete in with a clear advantage.
I think India before 1990s used to have nearly 200% tariffs (I am not entirely sure on the numbers, but it was absurdly high). This did not fare well for India because quality products made in countries like US and Japan were incredibly expensive. Some companies got around this by forming alliances with local companies leading to companies like (Maruti-Suzuki, Hero-Honda, Mahindra-Ford, etc.)
But US seems to me in a position where they can impose tariffs on some competing countries and reasonably expect their local market to occupy the space created
1. No Party shall impose customs duties, fees, or other charges on or in connection with the importation or exportation of digital products transmitted electronically, between a person of one Party and a person of another Party.
The full chapter on digital trade: https://ustr.gov/sites/default/files/files/agreements/FTA/US...
This isn’t hyperbole. Right now, Oracle and Akamai is illegally supporting TikTok even though a bipartisan law was passed and it was upheld by the conservative court because Trump said it was okay.
You're right though, with digital goods it's ambiguous. If the company has a US entity is that the importer? That's the scenario that popped into my (somewhat tired) head. Probably because Canada has been trying to impose taxes on US tech companies with a similar argument.
If you buy a good online in a separate country, where is the transaction made?