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Comment by nimos | Hacker News Reader

Almost all the trade deficit numbers being thrown around by the US administration don't include trade in services which the US generally has a large surplus. A lot of that is very high margin tech SASS/advertising.

If this continues it seems like this could be a "digg->reddit" type moment for US tech. In some ways it is easier for a lot of people to leave facebook than it is for a single person. If you look at gross margins there is a lot of room for competition, though network effects make that competition very difficult. Maybe this is the catalyst for competitors to break in.

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>Almost all the trade deficit numbers being thrown around by the US administration don't include trade in services which the US generally has a large surplus.

Then why don’t other countries tax US services? I don’t even hear this from anyone in the media too

I think that's the nuclear option, at least for China.

Aren't these kinds of services already largely banned in China?

Yes, and that’s always mysteriously forgotten in these conversations.

Historically, China stole US IP and software, like Windows, en masse. Now they refuse to import our main export product — software — while we import their physical products and software like TikTok.

If we were allowed to export our services to China in exchange, this would be a very different geopolitical moment.

> If we were allowed to export our services to China in exchange, this would be a very different geopolitical moment.

No, it wouldn't, just look at how Canada's being treated. The mothership would just broadcast different excuses.

What would it take for Canada to hit 2%?

https://globalnews.ca/news/11050336/canada-defence-spending-...

The US massively subsidizes Canada’s national defense and energy production (crude oil refining).

Thank you for providing me a front-row example of it. There's always one bullshit excuse or another.

In reality, the US suppresses Canada's national defense, because for some weird reason, it doesn't want a heavily-armed neighbor.

As for energy, for every dollar of it that it buys, it derives far more than a dollar of economic utility from it, which is why it's screaming bloody murder at the mere mention of Canada turning off, or adding surcharges at the tap.

All this is why in 2025, one would have to be an utter fool to expect America to keep faith.

In reality, Canadians have bravely fought and died for American interests in the Middle East. Don’t take any of this as my personal view, or as a repudiation of the interpersonal camaraderie that Americans, by and large, still feel with Canadians (although I understand it’s no longer universally reciprocated).

However, as a matter of industrial economic reality, NAFTA likely benefited Canada more than it did the US, and the US does subsidize NATO and Canadian defense by extension. What barriers are there to an independent Canadian defense industry?

(Although I would argue that NAFTA benefited both countries, and we should continue our free trade agreements!)

>What barriers are there to an independent Canadian defense industry?

A defense industry is intertwined with a industry for civilians, for example in aeronautics. Certain nearby trading partners have historically stymied attempts to maintain such an industry.

On the contrary, NAFTA supported Canadian industry! Auto, agriculture, energy, you name it.

I agree, even though I don’t agree with how these tarrifs were implemented I don’t have any sympathy for China. President Trump is absolutely right when he says China took full advantage of the US policies.

They do - the EU and UK have 'Digital Services Tax' which predominantly targets US social media giants..

Countries can and have under the name of "digital services tax". Generally the rates are low and often only cover a subset of things. The US and tech giants have historically pushed back hard on them. This is a reasonably up to date link to the situation in Europe https://taxfoundation.org/data/all/eu/digital-tax-europe-202... Keep in mind many of those are proposed and not implemented.

The real threat to the US IMO is losing marketshare. The stock market has gotten beat up but most of the real pain for the average person is still off in the horizon. Anti-US sentiment is growing quickly, if we enter a full blown global recession/depression I think it could be a real catalyst for large sudden shifts away from US tech companies.

The EU is currently thinking about doing exactly that.

What about these tariffs would cause the millions/billions of non-paying users to stop using the free service that is facebook?

What caused people to stop using the free service that is MySpace? What caused people stop using the free service that is Digg? Being free isn't particularly novel. Facebook isn't providing this service out of some sense of altruism. It is incredibly profitable.

What about the tariffs would cause people to stop using it? Because they - along with many other of the administrations postulations and policies - are incredibly unpopular and a complete 180 of US foreign trade policy. Because tech is a money printing machine for the US and tech oligarchs who have largely bent the knee to Trump.

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