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> And Canada is taxing you back This seems illogical. You can't simultaneously claim that the US is paying higher prices for Canadian goods because of US-impos

by ericmay 2mo ago

> And Canada is taxing you back This seems illogical. You can't simultaneously claim that the US is paying higher prices for Canadian goods because of US-imposed tariffs and then turn around and say only that Americans are paying a tax on buying Canadian goods on Canadian-imposed tariffs. Both countries are either paying higher prices or paying higher taxes. Canada's tariffs must also be viewed as America is taxing Canada back, or else neither can be viewed that way. Separately you can go back prior to 2024, for example, and discuss monopolization of Canadian companies and import duties on American products which also must be treated in the same fashion for this analysis - Canadian imposed tariffs on dairy (I don't care about dairy other than it being an obvious example) would have to be claimed to be an American tax on Canadians for this to be consistent. Whatever claim you would levy here, equally applies to Canada minus the dollar volumes depending on which country imports more and what products are imported since Canada is also implementing additional (because they've had tariffs for a while) tariffs on specific goods/services.

hn_throwaway_99 2mo ago
I think you are reading way too much into that "you" in that sentence. I read it simply as a list and total of all the retaliatory tariffs that Canada is imposing, and the site emphasizes that this is obviously bad for American jobs, not that American consumers pay the tariffs that Canada is imposing. This whole trade war with Canada has to be one of the dumbest fucking things I have ever witnessed, and that's saying a lot given the complete incompetence and buffoonery of the current US administration. First they had to imitate Idiocracy with the the WFC fight on the White House lawn, now they're imitating South Park by killing relations with Canada. Heck, a big joke in the original South Park movie was that it was so inconceivable that of all countries Canada is the one we'd have a war with, but Trump just wants to speed run to every country on the planet hating our guts.
- ericmay 2mo ago
  > I think you are reading way too much into that "you" in that sentence. Sure that's fair, but on the other hand that's what was written and the framing I think is unfair and inconsistent. Of course, others may go along happily reading it and thinking wow we created these tariffs to raise prices and Canada decided to tax us!? That's worth clearing up and being honest about, in my view. Imagine someone writes another article and frames it as though Americans are taxing Canadians with tariffs. Surely folks would want to "clear that up" wouldn't they?
  - malshe 2mo ago
    I see your point but it's all AI written and I doubt any human actually read it to ascertain accuracy
    - ericmay 2mo ago
      Sure that's super fair haha. Good call
  - horsawlarway 2mo ago
    I think it's a bit more complicated than you're implying here. Yes - you are technically correct that each country is taxing its own citizens/businesses with tariffs. I also agree that phrasing is more honest than what the article states But for interconnected supply chains, the result can get pretty muddled. Ex - Canada sells wood to a US company. US applies tariff. That US company sells a component made of that wood back to a Canadian company. Canada applies tariff. That Canadian company uses that component to produce a good that's sold to US consumers. US applies tariff. etc... For the end purchasers of the finished product - the net increase in price (the final "tax" you pay) might be a summation of various tariffs applied by both countries as they interact with each other. The price increases at the final sale are additive, regardless of which country is capturing the tariff as tax. The real result is that the product is just more expensive to make when tariffs are in place, and so must be sold at a higher price based on the total tax applied to all parts of the product (regardless of where in the chain it was US/Canada/China/Other/Etc actually capturing a tariff). Ex - you will pay more because of US tariffs, and more again because of Canadian tariffs in response to US tariffs.
    - ericmay 2mo ago
      I don’t disagree with you at all. My point was this: > Ex - you will pay more because of US tariffs, and more again because of Canadian tariffs in response to US tariffs. Also applies to Canada for the exact same reasons you highlighted. So when they say that Canada is taxing Americans because of tariffs, it goes both ways.
- mullingitover 2mo ago
  > This whole trade war with Canada has to be one of the dumbest fucking things I have ever witnessed, and that's saying a lot given the complete incompetence and buffoonery of the current US administration. You'd think that, strategically, a decapitation strike is the worst thing that could happen for a nation. However, that would be incorrect: the worst thing that could happen is this, a vain and incompetent buffoon installed in the top leadership position. With no leader you're just not making decisions, but the organization can continue operating under autonomous cells. With a hyperactive incompetent leader you're speedrunning every conceivable bad decision and everyone just has to look on in horror.
  - nickff 2mo ago
    >"the worst thing that could happen is this, a vain and incompetent buffoon installed in the top leadership position." Well, Canada repeatedly elected Justin Trudeau (now departed)... so both countries have made some... interesting decisions...
    - snapcaster 2mo ago
      oh come on, you can't seriously be comparing those two. One of them can form complete sentences
      - nwatson 2mo ago
        As incomplete as the sentences from one of these may be, their "weave" style tickles the attention mechanisms for their most ardent supporters, and comes across as heartfelt, relatable, and ultimately a coherent stream of consciousness dump.
        sagarm 2mo ago
        In other words, complete sentences are the province of the elite.
      - jleyank 2mo ago
        In at least two languages.
- c0nsumer 2mo ago
  For more movies about the ridiculousness of having a fight with Canada, of all places, see Canadian Bacon: https://www.imdb.com/title/tt0109370/ https://www.imdb.com/title/tt0109370/ Summary quote from IMDB: "The U.S. President, low in the opinion polls, gets talked into raising his popularity by trying to start a cold war against Canada."
foxyv 2mo ago
I think the idea is that tariffs cut both ways. They increase prices for foreign goods as well as reduce demand for imports causing job losses in the exporting country. The original tariffs increase prices and the retaliatory tariffs reduce demand for American products causing job loss.
- ericmay 2mo ago
  Yes but since Canada is also initiating new tariffs (they've had existing ones for specific products and industries already) so anything said here applies to Canada as well. For example Canadian tariffs increase prices and their retaliatory tariffs also reduce demand for Canadian products leading to job losses.
  - davidw 2mo ago
    They are willing to bear some pain in order to hit back at the US administration. And they're pretty united - Doug Ford for instance is not on the same team as Mark Carney - but has been very vocal about striking back. It's really a singular achievement to piss off such a good neighbor so badly.
    - epolanski 2mo ago
      And don't forget the Greenland threats, those for us Europeans, and in European foreign affairs are a line of non return. Other administrations will not be able to repair the damage, because what was exposed really is that the US system allows for each administration to destroy and 180 whatever the previous one did.
      - ericmay 2mo ago
        They can be repaired - but if you think they can't be, then the US should act accordingly which would mean yea go ahead and take over Greenland, withdraw forces from Europe, &c. because as you say they can't be fixed so we might as well do whatever we think we want or need to do - that's the chain of reasoning that this theory of unrepairable relations sends us down. But we've had challenges and issues before. The US has tried to obtain Greenland in the past. There are plenty of examples of such things throughout history ranging from the Suez Crises, to French withdrawal from NATO, to, well, 2 World Wars caused by Europe, and more and all was forgiven, if not forgotten. We sometimes think that things in the moment are perhaps more important than they are. The news wants us to believe the world is ending to get clicks. Europe still lets Russian tourists in and houses Russian billionaires and their families despite this existential threat from Russia, as an example.
llm_nerd 2mo ago
> This seems illogical. It is. When Canada imposes retaliatory tariffs, it is of course a tax on Canadians. Though it is also a market inducement, and one of the complaints of the admin is that Canada's retaliatory vehicle tariffs -- literally mirroring the tariffs the US applied to Canada -- caused a 22% drop in imports. > import duties on American products which also must be treated in the same fashion for this analysis - Canadian imposed tariffs on dairy Can you tell us if those import duties are in the room with us? Because you know they didn't exist, right? There have been $0 in tariffs on US dairy. The tariffs only come into play when the US imports pass a certain volume -- and precisely the same tariffs happen in both directions -- and the US hasn't. Now the US has complained that there are administrative barriers, and maybe so, but they sure aren't clear on what they are, and lie about everything constantly. Prior to this trade war, there was essentially 0% tariffs on products from the US. And the only reason there is a trade "deficit" is because of massive amounts of Alberta oil that the US desperately needs. I mean, it's hilarious that Trump was literally celebrating bringing back Keystone XL, and increasing the flow of Alberta oil, while simultaneously complaining essentially about that very same oil. This is, as the WSJ named it, the stupidest trade war in history. All for yet another distraction, as Trump's entire base just desperately need to puff their little chests and celebrate when they think he is punching down on someone. Even if it makes their lives worse and their lot worse.
- ericmay 2mo ago
  Let's set the framing correctly because I think we're starting off on the wrong foot. The US is not in a desperate need of any product from Canada. Nice to have and super important? Yea. Desperate? No. Not by any stretch of the imagination. > There have been $0 in tariffs on US dairy. The tariffs only come into play when the US imports pass a certain volume So there are tariffs on US dairy... Maybe the US can just say well once 50 cars are shipped in from Canada we impose 300% duties. I'm not part of team Trump here or anything, but these kinds of arguments are semantics - at the end of the day neither Canada, China, the EU, or others who claim to be free-trade economies (in some sense) are really living up to the hype, whether that's outright tariffs, or complicated regulatory or policy schemes to circle around what amounts to a tax on foreign produced goods. > This is, as the WSJ named it, the stupidest trade war in history. Wall Street (and the WSJ) also helped move American jobs overseas. So are you aligning with corporate America's viewpoint on trade? They also want much lower corporate taxes. :) > All for yet another distraction, as Trump's entire base just desperately need to puff their little chests and celebrate when they think he is punching down on someone. Even if it makes their lives worse and their lot worse. I don't know that this is a distraction and it would be a mistake to dismiss these concerns out of hand as chest-pumping.
theropost 2mo ago
It's really not that complicated imo... So what do you do when your government is effectively bankrupt? You’ve accumulated more debt than you can realistically repay without imposing enormous economic pain, but you still need to keep the country functioning. One historical answer is an inflationary cycle combined with a trade war. You impose tariffs on foreign goods, which creates government revenue while also making imported goods more expensive. You then blame the resulting price increases on foreign competitors and trading partners. But the tariffs themselves are inflationary because businesses ultimately pass much of those higher costs on to consumers. As prices rise, nominal tax revenues also rise because governments are collecting taxes on larger dollar amounts. Meanwhile, governments have an incentive to continue borrowing, spending, and potentially expanding the money supply to deal with their fiscal problems. More money chasing higher-priced goods creates further inflation. The critical part is what inflation does to existing debt. If you owe $1 trillion in debt today, but inflation dramatically reduces the purchasing power of the dollar over time, that $1 trillion becomes much easier to repay in real terms. The nominal debt remains the same, but its real economic burden shrinks. So you can end up with a feedback loop: tariffs increase prices, higher prices increase nominal tax receipts, fiscal pressure encourages more borrowing and monetary expansion, monetary expansion fuels more inflation, and inflation gradually erodes the real value of the government's existing debt. In other words, rather than explicitly defaulting on the debt, you can effectively "inflate it away." The creditors get paid back in dollars, but those dollars are worth substantially less than the dollars they originally lent. The danger is that this isn't free money. The cost is ultimately transferred to consumers, savers, wage earners, and holders of government debt through reduced purchasing power. And once inflation expectations become entrenched, controlling the cycle can become extremely difficult without causing a recession or other severe economic disruption.
- stasomatic 2mo ago
  Hey, thanks for this comment. You seem to be knowledgeable about the topic and I am a moron. What happens to consumer spending and associated tax revenue when imported goods cost significantly more? Let's take a hypothetical German auto brand that has no factories in the US (BMW, MB, VW have factories, not sure if Audi and Porsche are grandfathered in because of VW). If a car that cost $100K before and now is $125K, it seems that the demographic that could afford that $100K will shrug and pay the higher price. Now, that's the well-off folks, a bit immune in this economy. What other consumer goods with imposed new tariffs will cause less spending and shrink the economy instead? It seems that tariffs are a net loss, besides I guess in cases when they are used to prevent dumping.
cwillu 2mo ago
If you're going to talk about canadian dairy tariffs, please note that (a) this was originally negotiated by trump the last time he was in office, and (b) the tariff only applies when the total imports exceed a limit, which iirc has never actually been exceeded.
- nba456_ 2mo ago
  It's never been exceeded because who's going to bother shipping dairy to Canada when you'll be taxed to hell the moment you sell any real volume.
  - ncphillips 2mo ago
    Nah because none of us will buy it
- ericmay 2mo ago
  Someone else shared this article [1] and I was reading a quote I thought was interesting: “[Canada] has a large dairy producing constituency that it wants to protect, so they put a cap on imports that can be accessed at a competitive rate. That's what we call a ‘TRQ’ (tariff rate quota),” says Becky Rasdall Vargas, senior vice president of trade and workforce policy at the International Dairy Foods Association. Under the TRQ, Canada accepts a certain amount of dairy products duty-free, without tariffs. "Rather, Rasdall Vargas blames the dispute on “a systemic set of failures” by Canadian administrators that intentionally prevent American dairy exports from reaching the import cap. These protectionist measures are intended to support Canadian dairy farmers. One rule, for example, requires that Canadian dairy processors be the primary recipients of American dairy products. “If you’re a U.S. exporter, you're going to want to sell to your customers, not to a competitor,” she says. “Another one is that retailers aren't eligible to obtain an import license quota in Canada. There are layers upon layers of rules that ultimately prevent U.S. exporters from being able to fill those quotas.” So I'm not sure the quota is as straightforward as many folks are making it out to be and there's more nuance there. This, assuming it is accurate, is really interesting and helps explain why US producers don't even meet the quota that was set. [1] https://www.farmprogress.com/farm-policy/the-real-story-behind-canada-s-250-dairy-tariffs https://www.farmprogress.com/farm-policy/the-real-story-behi...
mthoms 2mo ago
First, I agree with your complaint about that wording. Aside from that, the "obvious" dairy tariffs you speak of are almost entirely theoretical. Those are anti-dumping tariffs that kick-in only when a certain threshold has been met. It never has. That's not to say there aren't trade barriers. The US side argues that there are market barriers that make reaching those quotas impossible [0]. It's a fair point and worth discussing. But let's call it what it is: it's a dispute about opening up a potential new market. Nobody has been over-charged and no American farmers have been "ripped off" (quoting DJT). If the end result is the same, do the details matter? Absolutely. Being overcharged or ripped off is something that gets people heated, (which is exactly why Trump uses that inflammatory language). Being denied market access because of administrative hurdles to a small-ish niche in a relatively small market like Canada? Not so much. Please don't repeat the falsehood that dairy tariffs are an "obvious" example of where Canada has imposed fees on American companies. The truth is more nuanced. [0] https://www.farmprogress.com/farm-policy/the-real-story-behind-canada-s-250-dairy-tariffs https://www.farmprogress.com/farm-policy/the-real-story-behi...
- ericmay 2mo ago
  Fair enough, I agree the truth is more nuanced. I regret even using dairy as that has caused a lot more of a discussion about the specific item being, idk, targeted? than I would have liked and detracted from a more broad point that I wanted to make or at least discuss. Thanks for sharing that article, will take a look at that too.
- gruez 2mo ago
  >Aside from that, the "obvious" dairy tariffs you speak of are almost entirely theoretical. Those are anti-dumping tariffs that kick-in only when a certain threshold has been met. It never has. What about others' contention that the reason why the quota hasn't been hit is that it's a pain to make use of? https://news.ycombinator.com/item?id=49455381 https://news.ycombinator.com/item?id=49455381
  - mthoms 2mo ago
    Huh? That's exactly what I described and linked to.
deleted 2mo ago
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SmirkingRevenge 2mo ago
That is definitely a flatly wrong statement. Unfortunately, it reinforces the Trumpian disinformation that tariffs are fees that other countries pay us... or something. Trump is taxing Americans when he imposes tariffs. Canada is taxing Canadians when they impose retaliatory tariffs. And FWIW, most economists think retaliatory tariffs are stupid - on net they cause more harm to the retaliating country than if there were no retaliation. But the politics around tariffs are stupid too. It's all stupid.
- senderista 2mo ago
  > And FWIW, most economists think retaliatory tariffs are stupid - on net they cause more harm to the retaliating country than if there were no retaliation. But the politics around tariffs are stupid too. It's all stupid. You can't divorce these tariffs from their geopolitical context, which is Trump threatening to annex Canada.
- deaux 2mo ago
  > And FWIW, most economists think retaliatory tariffs are stupid - on net they cause more harm to the retaliating country than if there were no retaliation. This is wrong, because you're using the extremely broad concept of "harm" for a specific monetary loss. There are many more things at play here than just money gained/lost.
tensor 2mo ago
Agreed that "Canada is taxing you back" doesn't make sense. But "America is taxing Canada" makes even less sense. Sorry, just no. America is taxing Americans, Canada is taxing Canadians, these taxes harm exports and imports. Also, we've never had fully free trade. You can whine about dairy, we can whine about unfair lumber tariffs. These are all part of CUMSA, an agreement that has been illegally violated every damn day under Trump's regime. Let's just cut to the chase. If Trump won't honour CUMSA why make any deal with him? There is no reason he'll honour any new agreement either. He was the one who negotiated CUMSA in the first place.
- drop_star 2mo ago
  The administration faces steep legal headwinds. Having already lost at the Supreme Court over the misuse of the IEEPA, the courts are likely to view Section 338 with significant skepticism. The statutory requirements of Section 338—specifically requiring a formal finding of discriminatory disadvantage against U.S. goods (hard to prove under CUSMA’s preferential framework) and strictly "offsetting" remedies—make the sweeping 50% broad-based tariffs legally vulnerable. Likely Outcome in Court: A federal court will likely grant an injunction temporarily staying the tariffs pending a full review, or strike them down entirely as exceeding executive statutory authority under Article I of the Constitution.
- ericmay 2mo ago
  > But "America is taxing Canada" makes even less sense I don’t disagree. I just wanted to point out the framing needs to be consistent, which I think you agree with. I also agree with you with respect to free trade. Every exporter is a free trade proponent. Curious how when it comes to imports or protecting domestic industries all of a sudden every country in the planet puts up some sort of protectionist barrier.
derf_ 2mo ago
It all comes down to who has pricing power. If Canadian exporters can raise prices without unduly harming sales, then the tariffs on their goods are predominantly paid by American consumers. If the US cannot, then the tariffs on their goods are predominantly paid by American exporters (and must be absorbed by reducing profit margins). Whether or not that is true, I have no idea. One would expect there to be enough diversity of trade that on the balance it cannot be that lopsided, but maybe that's wrong. It is certainly possible for one side of a trade war to be hurt both coming and going, without any logical inconsistency.

by ericmay 2mo ago

hn_throwaway_99 2mo ago

I think you are reading way too much into that "you" in that sentence. I read it simply as a list and total of all the retaliatory tariffs that Canada is imposing, and the site emphasizes that this is obviously bad for American jobs, not that American consumers pay the tariffs that Canada is imposing. This whole trade war with Canada has to be one of the dumbest fucking things I have ever witnessed, and that's saying a lot given the complete incompetence and buffoonery of the current US administration. First they had to imitate Idiocracy with the the WFC fight on the White House lawn, now they're imitating South Park by killing relations with Canada. Heck, a big joke in the original South Park movie was that it was so inconceivable that of all countries Canada is the one we'd have a war with, but Trump just wants to speed run to every country on the planet hating our guts.

ericmay 2mo ago
> I think you are reading way too much into that "you" in that sentence. Sure that's fair, but on the other hand that's what was written and the framing I think is unfair and inconsistent. Of course, others may go along happily reading it and thinking wow we created these tariffs to raise prices and Canada decided to tax us!? That's worth clearing up and being honest about, in my view. Imagine someone writes another article and frames it as though Americans are taxing Canadians with tariffs. Surely folks would want to "clear that up" wouldn't they?
- malshe 2mo ago
  I see your point but it's all AI written and I doubt any human actually read it to ascertain accuracy
  - ericmay 2mo ago
    Sure that's super fair haha. Good call
- horsawlarway 2mo ago
  I think it's a bit more complicated than you're implying here. Yes - you are technically correct that each country is taxing its own citizens/businesses with tariffs. I also agree that phrasing is more honest than what the article states But for interconnected supply chains, the result can get pretty muddled. Ex - Canada sells wood to a US company. US applies tariff. That US company sells a component made of that wood back to a Canadian company. Canada applies tariff. That Canadian company uses that component to produce a good that's sold to US consumers. US applies tariff. etc... For the end purchasers of the finished product - the net increase in price (the final "tax" you pay) might be a summation of various tariffs applied by both countries as they interact with each other. The price increases at the final sale are additive, regardless of which country is capturing the tariff as tax. The real result is that the product is just more expensive to make when tariffs are in place, and so must be sold at a higher price based on the total tax applied to all parts of the product (regardless of where in the chain it was US/Canada/China/Other/Etc actually capturing a tariff). Ex - you will pay more because of US tariffs, and more again because of Canadian tariffs in response to US tariffs.
  - ericmay 2mo ago
    I don’t disagree with you at all. My point was this: > Ex - you will pay more because of US tariffs, and more again because of Canadian tariffs in response to US tariffs. Also applies to Canada for the exact same reasons you highlighted. So when they say that Canada is taxing Americans because of tariffs, it goes both ways.
mullingitover 2mo ago
> This whole trade war with Canada has to be one of the dumbest fucking things I have ever witnessed, and that's saying a lot given the complete incompetence and buffoonery of the current US administration. You'd think that, strategically, a decapitation strike is the worst thing that could happen for a nation. However, that would be incorrect: the worst thing that could happen is this, a vain and incompetent buffoon installed in the top leadership position. With no leader you're just not making decisions, but the organization can continue operating under autonomous cells. With a hyperactive incompetent leader you're speedrunning every conceivable bad decision and everyone just has to look on in horror.
- nickff 2mo ago
  >"the worst thing that could happen is this, a vain and incompetent buffoon installed in the top leadership position." Well, Canada repeatedly elected Justin Trudeau (now departed)... so both countries have made some... interesting decisions...
  - snapcaster 2mo ago
    oh come on, you can't seriously be comparing those two. One of them can form complete sentences
    - nwatson 2mo ago
      As incomplete as the sentences from one of these may be, their "weave" style tickles the attention mechanisms for their most ardent supporters, and comes across as heartfelt, relatable, and ultimately a coherent stream of consciousness dump.
      - sagarm 2mo ago
        In other words, complete sentences are the province of the elite.
    - jleyank 2mo ago
      In at least two languages.
c0nsumer 2mo ago
For more movies about the ridiculousness of having a fight with Canada, of all places, see Canadian Bacon: https://www.imdb.com/title/tt0109370/ https://www.imdb.com/title/tt0109370/ Summary quote from IMDB: "The U.S. President, low in the opinion polls, gets talked into raising his popularity by trying to start a cold war against Canada."

foxyv 2mo ago

I think the idea is that tariffs cut both ways. They increase prices for foreign goods as well as reduce demand for imports causing job losses in the exporting country. The original tariffs increase prices and the retaliatory tariffs reduce demand for American products causing job loss.

ericmay 2mo ago
Yes but since Canada is also initiating new tariffs (they've had existing ones for specific products and industries already) so anything said here applies to Canada as well. For example Canadian tariffs increase prices and their retaliatory tariffs also reduce demand for Canadian products leading to job losses.
- davidw 2mo ago
  They are willing to bear some pain in order to hit back at the US administration. And they're pretty united - Doug Ford for instance is not on the same team as Mark Carney - but has been very vocal about striking back. It's really a singular achievement to piss off such a good neighbor so badly.
  - epolanski 2mo ago
    And don't forget the Greenland threats, those for us Europeans, and in European foreign affairs are a line of non return. Other administrations will not be able to repair the damage, because what was exposed really is that the US system allows for each administration to destroy and 180 whatever the previous one did.
    - ericmay 2mo ago
      They can be repaired - but if you think they can't be, then the US should act accordingly which would mean yea go ahead and take over Greenland, withdraw forces from Europe, &c. because as you say they can't be fixed so we might as well do whatever we think we want or need to do - that's the chain of reasoning that this theory of unrepairable relations sends us down. But we've had challenges and issues before. The US has tried to obtain Greenland in the past. There are plenty of examples of such things throughout history ranging from the Suez Crises, to French withdrawal from NATO, to, well, 2 World Wars caused by Europe, and more and all was forgiven, if not forgotten. We sometimes think that things in the moment are perhaps more important than they are. The news wants us to believe the world is ending to get clicks. Europe still lets Russian tourists in and houses Russian billionaires and their families despite this existential threat from Russia, as an example.

llm_nerd 2mo ago

> This seems illogical. It is. When Canada imposes retaliatory tariffs, it is of course a tax on Canadians. Though it is also a market inducement, and one of the complaints of the admin is that Canada's retaliatory vehicle tariffs -- literally mirroring the tariffs the US applied to Canada -- caused a 22% drop in imports. > import duties on American products which also must be treated in the same fashion for this analysis - Canadian imposed tariffs on dairy Can you tell us if those import duties are in the room with us? Because you know they didn't exist, right? There have been $0 in tariffs on US dairy. The tariffs only come into play when the US imports pass a certain volume -- and precisely the same tariffs happen in both directions -- and the US hasn't. Now the US has complained that there are administrative barriers, and maybe so, but they sure aren't clear on what they are, and lie about everything constantly. Prior to this trade war, there was essentially 0% tariffs on products from the US. And the only reason there is a trade "deficit" is because of massive amounts of Alberta oil that the US desperately needs. I mean, it's hilarious that Trump was literally celebrating bringing back Keystone XL, and increasing the flow of Alberta oil, while simultaneously complaining essentially about that very same oil. This is, as the WSJ named it, the stupidest trade war in history. All for yet another distraction, as Trump's entire base just desperately need to puff their little chests and celebrate when they think he is punching down on someone. Even if it makes their lives worse and their lot worse.

ericmay 2mo ago
Let's set the framing correctly because I think we're starting off on the wrong foot. The US is not in a desperate need of any product from Canada. Nice to have and super important? Yea. Desperate? No. Not by any stretch of the imagination. > There have been $0 in tariffs on US dairy. The tariffs only come into play when the US imports pass a certain volume So there are tariffs on US dairy... Maybe the US can just say well once 50 cars are shipped in from Canada we impose 300% duties. I'm not part of team Trump here or anything, but these kinds of arguments are semantics - at the end of the day neither Canada, China, the EU, or others who claim to be free-trade economies (in some sense) are really living up to the hype, whether that's outright tariffs, or complicated regulatory or policy schemes to circle around what amounts to a tax on foreign produced goods. > This is, as the WSJ named it, the stupidest trade war in history. Wall Street (and the WSJ) also helped move American jobs overseas. So are you aligning with corporate America's viewpoint on trade? They also want much lower corporate taxes. :) > All for yet another distraction, as Trump's entire base just desperately need to puff their little chests and celebrate when they think he is punching down on someone. Even if it makes their lives worse and their lot worse. I don't know that this is a distraction and it would be a mistake to dismiss these concerns out of hand as chest-pumping.

theropost 2mo ago

It's really not that complicated imo... So what do you do when your government is effectively bankrupt? You’ve accumulated more debt than you can realistically repay without imposing enormous economic pain, but you still need to keep the country functioning. One historical answer is an inflationary cycle combined with a trade war. You impose tariffs on foreign goods, which creates government revenue while also making imported goods more expensive. You then blame the resulting price increases on foreign competitors and trading partners. But the tariffs themselves are inflationary because businesses ultimately pass much of those higher costs on to consumers. As prices rise, nominal tax revenues also rise because governments are collecting taxes on larger dollar amounts. Meanwhile, governments have an incentive to continue borrowing, spending, and potentially expanding the money supply to deal with their fiscal problems. More money chasing higher-priced goods creates further inflation. The critical part is what inflation does to existing debt. If you owe $1 trillion in debt today, but inflation dramatically reduces the purchasing power of the dollar over time, that $1 trillion becomes much easier to repay in real terms. The nominal debt remains the same, but its real economic burden shrinks. So you can end up with a feedback loop: tariffs increase prices, higher prices increase nominal tax receipts, fiscal pressure encourages more borrowing and monetary expansion, monetary expansion fuels more inflation, and inflation gradually erodes the real value of the government's existing debt. In other words, rather than explicitly defaulting on the debt, you can effectively "inflate it away." The creditors get paid back in dollars, but those dollars are worth substantially less than the dollars they originally lent. The danger is that this isn't free money. The cost is ultimately transferred to consumers, savers, wage earners, and holders of government debt through reduced purchasing power. And once inflation expectations become entrenched, controlling the cycle can become extremely difficult without causing a recession or other severe economic disruption.

stasomatic 2mo ago
Hey, thanks for this comment. You seem to be knowledgeable about the topic and I am a moron. What happens to consumer spending and associated tax revenue when imported goods cost significantly more? Let's take a hypothetical German auto brand that has no factories in the US (BMW, MB, VW have factories, not sure if Audi and Porsche are grandfathered in because of VW). If a car that cost $100K before and now is $125K, it seems that the demographic that could afford that $100K will shrug and pay the higher price. Now, that's the well-off folks, a bit immune in this economy. What other consumer goods with imposed new tariffs will cause less spending and shrink the economy instead? It seems that tariffs are a net loss, besides I guess in cases when they are used to prevent dumping.

cwillu 2mo ago

If you're going to talk about canadian dairy tariffs, please note that (a) this was originally negotiated by trump the last time he was in office, and (b) the tariff only applies when the total imports exceed a limit, which iirc has never actually been exceeded.

nba456_ 2mo ago
It's never been exceeded because who's going to bother shipping dairy to Canada when you'll be taxed to hell the moment you sell any real volume.
- ncphillips 2mo ago
  Nah because none of us will buy it
ericmay 2mo ago
Someone else shared this article [1] and I was reading a quote I thought was interesting: “[Canada] has a large dairy producing constituency that it wants to protect, so they put a cap on imports that can be accessed at a competitive rate. That's what we call a ‘TRQ’ (tariff rate quota),” says Becky Rasdall Vargas, senior vice president of trade and workforce policy at the International Dairy Foods Association. Under the TRQ, Canada accepts a certain amount of dairy products duty-free, without tariffs. "Rather, Rasdall Vargas blames the dispute on “a systemic set of failures” by Canadian administrators that intentionally prevent American dairy exports from reaching the import cap. These protectionist measures are intended to support Canadian dairy farmers. One rule, for example, requires that Canadian dairy processors be the primary recipients of American dairy products. “If you’re a U.S. exporter, you're going to want to sell to your customers, not to a competitor,” she says. “Another one is that retailers aren't eligible to obtain an import license quota in Canada. There are layers upon layers of rules that ultimately prevent U.S. exporters from being able to fill those quotas.” So I'm not sure the quota is as straightforward as many folks are making it out to be and there's more nuance there. This, assuming it is accurate, is really interesting and helps explain why US producers don't even meet the quota that was set. [1] https://www.farmprogress.com/farm-policy/the-real-story-behind-canada-s-250-dairy-tariffs https://www.farmprogress.com/farm-policy/the-real-story-behi...

mthoms 2mo ago

First, I agree with your complaint about that wording. Aside from that, the "obvious" dairy tariffs you speak of are almost entirely theoretical. Those are anti-dumping tariffs that kick-in only when a certain threshold has been met. It never has. That's not to say there aren't trade barriers. The US side argues that there are market barriers that make reaching those quotas impossible [0]. It's a fair point and worth discussing. But let's call it what it is: it's a dispute about opening up a potential new market. Nobody has been over-charged and no American farmers have been "ripped off" (quoting DJT). If the end result is the same, do the details matter? Absolutely. Being overcharged or ripped off is something that gets people heated, (which is exactly why Trump uses that inflammatory language). Being denied market access because of administrative hurdles to a small-ish niche in a relatively small market like Canada? Not so much. Please don't repeat the falsehood that dairy tariffs are an "obvious" example of where Canada has imposed fees on American companies. The truth is more nuanced. [0] https://www.farmprogress.com/farm-policy/the-real-story-behind-canada-s-250-dairy-tariffs https://www.farmprogress.com/farm-policy/the-real-story-behi...

ericmay 2mo ago
Fair enough, I agree the truth is more nuanced. I regret even using dairy as that has caused a lot more of a discussion about the specific item being, idk, targeted? than I would have liked and detracted from a more broad point that I wanted to make or at least discuss. Thanks for sharing that article, will take a look at that too.
gruez 2mo ago
>Aside from that, the "obvious" dairy tariffs you speak of are almost entirely theoretical. Those are anti-dumping tariffs that kick-in only when a certain threshold has been met. It never has. What about others' contention that the reason why the quota hasn't been hit is that it's a pain to make use of? https://news.ycombinator.com/item?id=49455381 https://news.ycombinator.com/item?id=49455381
- mthoms 2mo ago
  Huh? That's exactly what I described and linked to.

deleted 2mo ago

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SmirkingRevenge 2mo ago

That is definitely a flatly wrong statement. Unfortunately, it reinforces the Trumpian disinformation that tariffs are fees that other countries pay us... or something. Trump is taxing Americans when he imposes tariffs. Canada is taxing Canadians when they impose retaliatory tariffs. And FWIW, most economists think retaliatory tariffs are stupid - on net they cause more harm to the retaliating country than if there were no retaliation. But the politics around tariffs are stupid too. It's all stupid.

senderista 2mo ago
> And FWIW, most economists think retaliatory tariffs are stupid - on net they cause more harm to the retaliating country than if there were no retaliation. But the politics around tariffs are stupid too. It's all stupid. You can't divorce these tariffs from their geopolitical context, which is Trump threatening to annex Canada.
deaux 2mo ago
> And FWIW, most economists think retaliatory tariffs are stupid - on net they cause more harm to the retaliating country than if there were no retaliation. This is wrong, because you're using the extremely broad concept of "harm" for a specific monetary loss. There are many more things at play here than just money gained/lost.

tensor 2mo ago

Agreed that "Canada is taxing you back" doesn't make sense. But "America is taxing Canada" makes even less sense. Sorry, just no. America is taxing Americans, Canada is taxing Canadians, these taxes harm exports and imports. Also, we've never had fully free trade. You can whine about dairy, we can whine about unfair lumber tariffs. These are all part of CUMSA, an agreement that has been illegally violated every damn day under Trump's regime. Let's just cut to the chase. If Trump won't honour CUMSA why make any deal with him? There is no reason he'll honour any new agreement either. He was the one who negotiated CUMSA in the first place.

drop_star 2mo ago
The administration faces steep legal headwinds. Having already lost at the Supreme Court over the misuse of the IEEPA, the courts are likely to view Section 338 with significant skepticism. The statutory requirements of Section 338—specifically requiring a formal finding of discriminatory disadvantage against U.S. goods (hard to prove under CUSMA’s preferential framework) and strictly "offsetting" remedies—make the sweeping 50% broad-based tariffs legally vulnerable. Likely Outcome in Court: A federal court will likely grant an injunction temporarily staying the tariffs pending a full review, or strike them down entirely as exceeding executive statutory authority under Article I of the Constitution.
ericmay 2mo ago
> But "America is taxing Canada" makes even less sense I don’t disagree. I just wanted to point out the framing needs to be consistent, which I think you agree with. I also agree with you with respect to free trade. Every exporter is a free trade proponent. Curious how when it comes to imports or protecting domestic industries all of a sudden every country in the planet puts up some sort of protectionist barrier.

derf_ 2mo ago

It all comes down to who has pricing power. If Canadian exporters can raise prices without unduly harming sales, then the tariffs on their goods are predominantly paid by American consumers. If the US cannot, then the tariffs on their goods are predominantly paid by American exporters (and must be absorbed by reducing profit margins). Whether or not that is true, I have no idea. One would expect there to be enough diversity of trade that on the balance it cannot be that lopsided, but maybe that's wrong. It is certainly possible for one side of a trade war to be hurt both coming and going, without any logical inconsistency.