4 ms·

Ask HN: Do the tarrifs impact software/SaaS? If so, how?

34 points by xeckr 2y ago

Will it be more difficult to sell software or SaaS across the border between Canada and the US?

fuzzfactor 2y ago
>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.
- bradac56 2y ago
  O yes fearmongering always helps. Back under your bridge troll.
  - theyknowitsxmas 2y ago
    But it's true. This doesn't affect winning founders on here.
  - scarface_74 2y ago
    So exactly how is it a good thing to add costs to everything you buy?
  - hello_moto 2y ago
    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.
- owenversteeg 2y ago
  Wow, the doom is off the charts here. 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?type=shaded 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%
  - qwytw 2y ago
    > Trump tariffs as of today stand around 90B/year 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%?
    - owenversteeg 2y ago
      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-the-us-bilateral-goods-deficit-with-china-increase-or-decrease-during-the-us-china-trade-conflict-20210621.html https://www.federalreserve.gov/econres/notes/feds-notes/did-...
      - qwytw 2y ago
        > Are you aware that the US did this before 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/effects-of-us-tariff-policy-changes-will-vary-sharply-across-sectors-countries-09-01-2025 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).
killingtime74 2y ago
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.
- schappim 2y ago
  If true, this could be a great opportunity to buy Shopify at a discount; however, I haven’t found any evidence that the tariffs apply to services.
walterbell 2y ago
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-and-levies/digital-services-tax.html https://www.canada.ca/en/services/taxes/excise-taxes-duties-... This article claims that digital services are not subject to direct US tariffs, https://www.codemastersinc.com/post/impact-of-u-s-tariffs-on-canadian-businesses-what-you-need-to-know 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.
bradac56 2y ago
[dead]
- blobcode 2y ago
  Only if the US has a change to sane leadership to go along with it
- 0172 2y ago
  It was never about the drugs or migrants. Trump himself said "nothing" Canada can do to prevent tariffs[1] [1]: https://www.ctvnews.ca/world/trumps-tariffs/article/nothing-canada-can-do-to-prevent-tariffs-says-trump/ https://www.ctvnews.ca/world/trumps-tariffs/article/nothing-...
  - theyknowitsxmas 2y ago
    https://www.whitehouse.gov/presidential-actions/2025/02/imposing-duties-to-address-the-flow-of-illicit-drugs-across-our-national-border/ https://www.whitehouse.gov/presidential-actions/2025/02/impo...
    - hello_moto 2y ago
      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)
  - bradac56 2y ago
    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.
- inverted_flag 2y ago
nejsjsjsbsb 2y ago
What about contracting? Hourly rates? Employment?
- nejsjsjsbsb 2y ago
  Genuine question!
- carbine 2y ago
  Services are much less likely to be impacted
kaaskop 2y ago
[flagged]
- nathanaldensr 2y ago
  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.
  - kaaskop 2y ago
    I'm not just talking about tariffs - though the way they've been weaponized is extortive. I'm talking about the threats of invasion towards Greenland.
  - qwytw 2y ago
    > Tariffs are not extortion 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...
  - hello_moto 2y ago
    Tariff is a legal tool, I give you that. 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.
KeithBrink 2y ago
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 full chapter on digital trade: https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/19-Digital-Trade.pdf https://ustr.gov/sites/default/files/files/agreements/FTA/US...
- bryanlarsen 2y ago
  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.
- scarface_74 2y ago
  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.
- ModernMech 2y ago
  USMCA is defacto null and void.
dismalaf 2y ago
Probably but with how weak the Canadian dollar is you can probably just eat the cost (assuming you're Canadian selling to the US).
- KeithBrink 2y ago
  This is not how tariffs work - the US company is responsible for the tariff, not the Canadian company.
  - dismalaf 2y ago
    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?

34 points by xeckr 2y ago

Will it be more difficult to sell software or SaaS across the border between Canada and the US?

>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.

bradac56 2y ago
O yes fearmongering always helps. Back under your bridge troll.
- theyknowitsxmas 2y ago
  But it's true. This doesn't affect winning founders on here.
- scarface_74 2y ago
  So exactly how is it a good thing to add costs to everything you buy?
- hello_moto 2y ago
  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.
owenversteeg 2y ago
Wow, the doom is off the charts here. 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?type=shaded 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%
- qwytw 2y ago
  > Trump tariffs as of today stand around 90B/year 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%?
  - owenversteeg 2y ago
    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-the-us-bilateral-goods-deficit-with-china-increase-or-decrease-during-the-us-china-trade-conflict-20210621.html https://www.federalreserve.gov/econres/notes/feds-notes/did-...
    - qwytw 2y ago
      > Are you aware that the US did this before 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/effects-of-us-tariff-policy-changes-will-vary-sharply-across-sectors-countries-09-01-2025 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).

killingtime74 2y ago

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.

schappim 2y ago
If true, this could be a great opportunity to buy Shopify at a discount; however, I haven’t found any evidence that the tariffs apply to services.

walterbell 2y ago

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-and-levies/digital-services-tax.html https://www.canada.ca/en/services/taxes/excise-taxes-duties-... This article claims that digital services are not subject to direct US tariffs, https://www.codemastersinc.com/post/impact-of-u-s-tariffs-on-canadian-businesses-what-you-need-to-know 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.

bradac56 2y ago

[dead]

blobcode 2y ago
Only if the US has a change to sane leadership to go along with it
0172 2y ago
It was never about the drugs or migrants. Trump himself said "nothing" Canada can do to prevent tariffs[1] [1]: https://www.ctvnews.ca/world/trumps-tariffs/article/nothing-canada-can-do-to-prevent-tariffs-says-trump/ https://www.ctvnews.ca/world/trumps-tariffs/article/nothing-...
- theyknowitsxmas 2y ago
  https://www.whitehouse.gov/presidential-actions/2025/02/imposing-duties-to-address-the-flow-of-illicit-drugs-across-our-national-border/ https://www.whitehouse.gov/presidential-actions/2025/02/impo...
  - hello_moto 2y ago
    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)
- bradac56 2y ago
  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.
inverted_flag 2y ago

nejsjsjsbsb 2y ago

What about contracting? Hourly rates? Employment?

nejsjsjsbsb 2y ago
Genuine question!
carbine 2y ago
Services are much less likely to be impacted

kaaskop 2y ago

[flagged]

nathanaldensr 2y ago
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.
- kaaskop 2y ago
  I'm not just talking about tariffs - though the way they've been weaponized is extortive. I'm talking about the threats of invasion towards Greenland.
- qwytw 2y ago
  > Tariffs are not extortion 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...
- hello_moto 2y ago
  Tariff is a legal tool, I give you that. 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.

KeithBrink 2y ago

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 full chapter on digital trade: https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/19-Digital-Trade.pdf https://ustr.gov/sites/default/files/files/agreements/FTA/US...

bryanlarsen 2y ago
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.
scarface_74 2y ago
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.
ModernMech 2y ago
USMCA is defacto null and void.

dismalaf 2y ago

Probably but with how weak the Canadian dollar is you can probably just eat the cost (assuming you're Canadian selling to the US).

KeithBrink 2y ago
This is not how tariffs work - the US company is responsible for the tariff, not the Canadian company.
- dismalaf 2y ago
  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?