alt Hacker NewsThe Tariff Cost: analysis of the costs to Americans from new tariffs on Canada
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Imagine you want to build a factory in the US. You pay tariffs on the factory equipment you need - much of it is made overseas. You pay tariffs on your input goods. And then when you try to export your customers get hit with a retaliatory tariff. I don't agree with tariffs but even if we accept some level of protectionism you can't tariff everything the way this administration wants. You have to pick what you actually want to prioritize and choose your battles.
I have anecdotal experience that makes the ~$1,600 per house hold feel like an underestimate.
We purchased a Subaru Outback right around the first round of tarrifs. We were in the market for the base trim, no bells & whistles. We ended up getting the highest trim bc all the remaining base trims were post-tarrifs and and cost $3.5k more than the pre-tarrif higher trim that was already in the lot.
Mind you the Subaru outback was assembled in IL, USA so it is not just imported entirely from Japan.
And that's not considering all the other "consuming" we do (which is quite limited being outdoor ppl).
This site looks good, and it's nice that it has data sources, but it would also be nice if it was clear about who built the site.
I like the idea behind the site, but I have some nits.
First, when you list something like a financial figure, you must also include the relevant time period. E.g. you say 16.0B in taxes collected by Canada from American exporters. But you don't list the time period.
Second, you say 313 are taxed today. What is this in reference to? Goods? People? Companies? Percentage?
The labels need some serious love.
Am I the only one who finds this site undecipherable?
Take this snippet for example:
American exporters
$16.0B of what American exporters sell to Canada sits in headings Canada taxes today, 10.5% of the total. From 8 September it is $26.5B.
See whose jobs
"See whose jobs" is even more confusing. Nothing about jobs was mentioned. It's talking, presumably about an increase in a tariff collected by Canada. I can understand this will affect certain jobs, but "See whose jobs" just confuses the situation more. I cannot figure out for the life of me what's going on.
Here's another example when you click the "nuclear option" it jumps, without context beyond "Canada’s energy supply is a fourth exposure, and a different kind" to this:
The nuclear option
Canada has not done this, and nothing here predicts it will. But tariffs are the smaller lever.
Flip the switch to see which states buy their energy from Canada, and whether they have anywhere else to buy it.
Crude cost per gallon
$1.86
what everyone else charges, up 26¢ a gallon
Both figures are prices the United States actually paid this year: $67.17 a barrel to Canada, $77.92 a barrel
to everyone else, across 704 million Canadian barrels. Careful with the gap, though. It is not a pump price,
since refining, distribution, tax and margin all sit on top of the crude. Nor is it really a discount: Canadian
barrels are mostly heavy crude, and heavy crude sells below lighter grades wherever it goes, so a lot of the
difference is just the grade. What replacing one with the other would cost is a question this page does
not have the data to answer.
From what I researched, Tarrifs that are discussed are impacting about 5% of overall trade between USA and Canada. This seems more political and clickbait than anything meaningful. 5% is not something to be concerned about unless you are directly impacted. “They” (news, politicians) just want your attention.
I'm afraid to comment because HN shadow bans when discussing international relations.
The wild part is that I'm quite academic, Waltz, Mearsheimer, Morgenthau are on my wall.
Okay let's get flagged for saying the uncomfortable silent part(chatGPT joke)...
Canada suffers more than the United States.
LBH, Canada has always been real economy loser with respect US trade with ~80b goods / services deficit AFTER discounted energy - cheap crude sales to US to fuel US refinery mismatch. US doesn't have strategic domestic energy self sufficiency without Canadian crude, CAN sludge should be selling at premium (same with VZ but we see how that went). In an ideal world Canada could be making more refining and selling high margin refined fossil to global markets and not sending ~80b to US.
Which is to say, if Canada sorts out inter provincial trade, pivot to domestic goods/services and sell commodities globally at benchmark prices it on paper come out ahead. Nvm associated brain drain via US integration killed what was left of Canadian tier1 industries (not much to be done). Or half reason CAN has to sell cheap to US is US lobbying (read political meddling / foreign influence) on infra/pipelines. Or discount NORAD which LBH missiles over polar orbit aren't stopping at Canada, as if Canada needs to free ride on NA security architecture.
TLDR is Canada always loser of even happy vassal arrangement, the carrot was always stale but it dint' need to be sweet with how big US stick is. But stick not big enough to force CAN to deepthroat new rotten carrot arrangement. At least not yet.
I assume the data source citations are referencing Census Department API endpoints, I would make the data sources explicit by adding links.
You also might want to consider archiving the data if you aren't already given this administration's tendency to remove data that doesn't further their agenda.
I'm trying to think of the number of people I (an American) know who considered trade with Canada to be a real issue.
The answer I keep coming back to is I know zero people who considered that.
Does the US have a trade imbalance that causes problems, particularly in our manufacturing sector? Yes. Can tariffs kind of help with that? Also yes. Really, you need to instill some sort of sense of duty to country in business leaders, which is a far heavier lift, but this at least puts a number to it.
Does picking a tariff fight with Canada, our closest cultural ally, solve the above problem to the point where it justifies the costs? Hell no.
Last time I checked, Canada was the largest trading partner of 27 states, directly and indirectly. Disclaimer; I’ve lived in both countries and am a dual citizen so not unbiased.
There's much more than tariffs at stake. The fight here is about influence but the way Trump is handling his push to regain American influence in the Western Hemisphere is pushing several allied countries even further away — including some that have been allies for more than two centuries.
This strategy is going to fail and when it does countries will trade much more one with others currencies and less with USA and USD. When that happens the American house of cards will collapse because it will no longer be possible to print trillions of dollars and count on other countries to absorb them trusting in the American policies and agreements.
The printing dollars formula facing low single-digit inflation is coming to an end.
U all can downvote me like on the credit-card thread but this is the reality for those outside the big American walls.
Numbers don't tell the whole story.
1. The U.S. economy is large, but insular. Most trade is between states, not with other countries. This is why most countries shrug and accept tariffs on their goods. For them, trade with the U.S. is not as big of a deal as it's portrayed, so it's not worth risking "fireworks" over. Canada and Mexico are rare exceptions to this. Canada, particularly, is reliant on international trade and trade with the U.S.. That's why they are fighting back for a deal that's better than slow death.
2. Canada is the #1 export market for a lot of American goods. e.g. Autos. Trump is determined to destroy Canada's auto manufacturing sector and bring it all to the U.S.. That might sound good to Americans, but they need to realize that this will necessarily mean they'll lose their #1 export market. If tariff's freeze Canada out of the American market and the Canadian auto industry dies, there will be no incentive to maintain the trade barriers against Chinese autos. Thanks to heavy automation, China is producing better autos than North America can at a fraction of the cost. American autos will be more expensive than ever after a forced retreat from Mexico and Canada and will be totally unable to compete on price and quality. Then there will be the lasting hostility to American products that Trump has caused.
3. Americans should closely examine some of the demands that were in the deal Canada just walked away from. One was for Canada to follow U.S. trade policy with other countries, no questions asked, no variations allowed. e.g. If the U.S. decides Tuvalu needs to be tariffed, Canada would be obligated to as well. Canada would also need to ask permission to sign trade deals with other countries. This would have been a complete surrender of sovereignty and would have reduced Canada's international trade policy to that of an American vassal. Not even an American state! This was a completely unacceptable proposal that was likely introduced to sabotage the negotiations. Howard Lutnick's last minute arrival and direct financial interest in generating more tariff refunds is not getting enough attention.
4. Americans are mostly ignorant of the fact that one of the biggest trade wars of the last century is going on with their Northern neighbour. Of those who are aware, the overwhelming majority are not supportive. Canadians are universally aware of it and overwhelmingly in support of Carney. Canadians have been cutting travel to the U.S. and buying fewer American goods for over a year. Now they're going to do it harder, and many won't stop even after the trade-war ends. Kids are watching their parents read labels in the grocery store to make sure they're not buying American goods and asking why. Trump can negotiate a new trade deal with Carney but he can't negotiate away the sense of betrayal Canadians now feel.
5. People are saying that Canada is too small to win this trade war, but this is not even remotely true. In Canada the war is supported because it's a matter of sovereignty, which is priceless. In the U.S., it's fracturing the Republican party. In Canada, people are voluntarily boycotting American goods and services, as well as travel to the U.S.. In the U.S., there are looming mid-terms that rising costs from a fresh trade-war could help decide. The most recent tariffs imposed by Trump were likely aimed at forcing an agreement he could tout as a "huge victory" right when he needed it. Instead, he has an embarrassing fiasco blowing up in his face. He's so short on ideas that he's threatening to rename lakes! The U.S. may be big, but U.S. leadership is small, inept, and poised to lose it's hold on power. Carney has signalled that he's ready to maintain this trade-war for the two years and change needed for Trump to leave office, but a few months may be all that's required.
imagine the level of stupid that's going down if the Dems do not also get get the Senate
this administration has three boxes it reaches into to sprinkle around daily
[CHAOS] [CORRUPTION] [CRUELTY]
hope everyone is enjoying the billion spent on golden statues in DC while you can't afford to put gas in your car
but don't worry, he still gets to fly around in his billion dollar QatarForceOne while taking $2 Million golf outings each weekend
I don't really understand why these tariffs are taken seriously. Haven't basically all previous tariffs been cancelled and refunded?
Canada is very unfortunately caught in the trade war between the USA and China. It's pretty easy right now for certain goods to bypass the US tariffs by being transshipped through Canada and enter the USA without tariff because of minimal processing. Chinese steel is a notable example of this.
And a lot of Canada's trade MOUs with other countries basically requires they have this special privilege. So there's gonna be fallout everywhere.
I wouldn't personally want to own Canadian dollars right now but I think they'll get this figured out.
> 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.