Pluralistic: Canada shouldn't retaliate with US tariffs; Picks and Shovels Chapter One (Part 6 – CONCLUSION) (15 Jan 2025)


Today's links


A 19th century painting depicting the burning of the White House during the War of 1812. The white Xes on the soldiers' uniforms have been replaced with white Canadian maple leaves.

Canada shouldn't retaliate with US tariffs (permalink)

Five years ago, Trump touted his "big, beautiful" replacement for NAFTA, the "free trade agreement" between the US, Mexico and Canada. Trump's NAFTA-2 was called the USMCA (US-Mexico-Canada Agreement) and it was pretty similar to NAFTA, to be honest.

That tells you a couple things: first, NAFTA was, broadly speaking a good thing for Trump and the ultra-wealthy donors who backed him (and got far richer as a result). That's why he kept it intact. NAFTA and USMCA are, at root, a way to make rich people richer by making poorer people poorer. Trump's base hated NAFTA because they (correctly) believed that it was being used to erode wages by chasing cheaper labor and more lax environmental controls in other countries. Neither NAFTA nor USMCA have any stipulations requiring exported goods to be manufactured by unionized workers, or in factories with robust environmental and workplace safety rules.

The point of NAFTA/USMCA is to goose profits by despoiling the environment, maiming workers, stealing their wages, paying them less, all while poisoning the Earth. Trump's "new" NAFTA was just the old NAFTA with some largely cosmetic changes so that Trump's base could be (temporarily) fooled into thinking Trump was righting the historic wrong of NAFTA.

However, there was one part of USMCA that marked a huge departure from NAFTA: the "IP" chapter. USMCA bound Canada and Mexico to implementing brutal new IP laws. For example, Mexico was forced to pass an anti-circumvention law that makes it a crime to tamper with "digital locks." This means that Mexican mechanics can't bypass the locks US car companies use to lock-out third party repair. Mexican farmers can't fix their own tractors. And, of course, Mexican software developers can't make alternative app stores for games consoles and mobile devices – they must sell their software through US Big Tech companies that take 30% of every sale:

https://pluralistic.net/2020/09/09/free-sample/#que-viva

Shamefully, Canada had already capitulated to most of these demands. Two Canadian Conservative Party politicians, Tony Clement and James Moore, had sold the country out in 2012, throwing away 6,138 negative responses to a consultation on a new DRM law (on the grounds that they were "babyish" views of "radical extremists"), siding instead with the 54 cranks and industry shills who supported their proposal:

https://pluralistic.net/2024/11/15/radical-extremists/#sex-pest

When Canadian politicians are pressed on why these anti-interoperability policies are good for Canada, they'll say that it's a condition of free trade, and the benefits of being able to export Canadian goods to the US without tariffs outweigh the costs of having to pay rents to American companies for consumables (like car parts or printer ink), repair, and software sales.

Sure, when Canadian software authors sell iPhone apps to Canadian customers, the payments take a round trip through Cupertino, California and return 30% short. But Canadian consumers get to buy iPhones without paying tariffs on them, and the oil, timber, and minerals we rip out of the ground can be sent to America without tariffs, either (oh, also, a few things that are still manufactured in Canada can do this, too).

Enter Trump, carrying a 25% tariff on all Canadian goods, which he has vowed to impose on his first day in office. Obviously, this demands a policy response. What should Canada do when Trump tears up his "big, beautiful" trade deal and whacks Canadian exporters? One obvious response is to impose a 25% retaliatory tariff on American exporters:

https://mishtalk.com/economics/canada-says-it-will-match-us-tariffs-if-trump-launches-trade-war/

After all, Canada and the US are one another's mutual largest trading partners. American businesses rely on selling things to Canadians, so a massive tariff on US goods will certainly make some of Trump's business-lobby backers feel pain, and maybe they'll talk some sense into him.

I think this would be a huge mistake. The most potent political lesson of the past four years is that politicians who preside over rising prices – regardless of their role in causing them – will swiftly feel the wrath of their voters. The public is furious about inflation, whether it comes from transient covid supply chain shocks, Russia's invasion of Ukraine, or cartels using "inflation" as cover for illegal, collusive price-gouging.

Canadians are very reliant on American imports of finished goods. That's another legacy of NAFTA: it crashed Canada's manufacturing sector. Canadian manufacturing companies treated the US as a "nearshore" source of non-union labor and weak environmental and safety rules, and shipped Canadian union jobs to American scabs. Canada's economy is supposedly now all about "services" but what we really export is stuff we tear out of the Earth.

Countries that are organized around resource extraction don't need fancy social safety nets or an educational system capable of producing a high-tech workforce. All you need to extract resources is a hole in the ground surrounded by guns, which explains a lot about shifts to the Canadian political climate since the Mulroney years.

Since Canada is now substantially reorganized as an open-pit mine for American manufacturers, cutting off American imports would drive the prices of everyday good sky-high, and would be political suicide.

But there's another way.

Because, of course, Canada – like any other country – has the capacity to make all kinds of things, including high-tech things. Sure, it's unlikely that Canada will launch another Research in Motion with a Blackberry smart-phone that will put the iPhone and Android in the shade. The mobile duopoly has the market sewn up, and can use predatory pricing, refusal to deal, and other anticompetitive tactics to strangle any competitor in its cradle.

But you know what Canada could make? A Canadian App Store. That's a store that Canadian software authors could use to sell Canadian apps to Canadian customers, charging, say, the standard payment processing fee of 5% rather than Apple's 30%. Canada could make app stores for the Android, Playstation and Xbox, too.

There's no reason that a Canadian app store would have to confine itself to Canadian software authors, either. Canadian app stores could offer 5% commissions on sales to US and global software authors, and provide jailbreaking kits that allows device owners all around the world to install the Canadian app stores where software authors don't get ripped off by American Big Tech companies.

Canadian companies like Honeybee already make "front-ends" for John Deere tractors – these are the components that turn a tractor into a plow, or a thresher, or another piece of heavy agricultural equipment. Honeybee struggles constantly to get its products to interface with Deere tractors, because Deere uses digital locks to block its products:

https://honeybee.ca/

Canada could produce jailbreaking kits for John Deere tractors, too – not just for Honeybee. Every ag-tech company in the world would benefit from commercially available, professionally supported John Deere jailbreaking kits. So would farmers, because these kits would restore farmers' Right to Repair their own tractors:

https://pluralistic.net/2022/05/08/about-those-kill-switched-ukrainian-tractors/

Speaking of repair: Canadian companies could jailbreak every make and model of every US automobile, and make independent, constantly updated diagnostic tools that every mechanic in the world could buy for hundreds of dollars, rather than paying the five-figure ransom that car makers charge for their own underpowered, junk versions of these tools.

Jailbreaking cars doesn't stop with repair, either. Cars like the Tesla are basically giant rent-extraction machines. If you want to use all the "features" your Tesla ships with – like access to the full charge on your battery – you have to pay tens of thousands of dollars in subscription fees over the life of the car, and when you sell your car, all that "downloadable content" is clawed back. No one will pay extra to buy your used Tesla just because you spent thousands on manufacturer upgrades, because they're all downgraded when you sign over the pink slip.

But Canadian companies could make jailbreaking kits for Teslas that unlock all the features in the car for a single low price – and again, they could sell these to every Tesla owner in the world.

Elon Musk doesn't invent anything, he just takes credit for other people's ideas, and that's as true of bad ideas as it is for good ones. Musk didn't invent the extractive Tesla rip-off: he stole it from inkjet printer companies like HP, who have used the fact that jailbreaking is illegal to turn printer ink into the most expensive fluid in the world, selling for more than $10,000/gallon.

Canadian companies could sell jailbreaking kits for inkjet printers that disconnect them from "subscription" services and disable the anti-features that check for and reject third party ink. People all over the world would buy these.

What's standing in the way of a Canadian industrial policy that focuses on raiding the sky-high margins of American monopolists with third-party add-ons, mods and jailbreaks?

Only the IP laws that Canada has agreed to in order to get tariff-free access to American markets. You know, the access that Trump has promised to end in less than a week's time?

Canada should tear up these laws – and not impose tariffs on American goods. That way, Canadians can still buy cheap American goods, and then they can save billions of dollars every year on the consumables, parts, software, and service for those goods.

This is hurting American big business where it hurts – in the ongoing rents it extracts from Canadians through IP laws like Bill C-11 (the law that bans jailbreaking). Canada could become a global high-tech export powerhouse, selling "complementary" goods that disenshittify all the worst practices of US tech monopolists, from car parts to insulin pumps.

It's the only kind of trade war that Canadian politicians can win against Americans: the kind where prices for Canadians don't go up because of tariffs; where the price of apps, repair, parts, and upgrades goes way down; and where a new, high-tech manufacturing sector pulls in vast sums from customers all over the world.

Canada can win this kind of war, even against a country as big and powerful as the USA. After all, we did it once before:

https://www.youtube.com/watch?v=5CK3EDncjGI


A remix of the cover of the Tor Books edition of 'Picks and Shovels,' depicting a vector art vintage PC, whose blue screen includes a male figure stepping out of the picture to the right. Superimposed on the art is the book's title in a custom, modernist font.

Picks and Shovels Chapter One (Part 6 – CONCLUSION) (permalink)

This month, I'm serializing the first chapter of my next novel, Picks and Shovels, a standalone Martin Hench novel that drops on Feb 17:

https://us.macmillan.com/books/9781250865908/picksandshovels

The book is up for presale on a Kickstarter that features the whole series as print books (with the option of personalized inscriptions), DRM-free ebooks, and a DRM-free audiobook read by Wil Wheaton:

https://www.kickstarter.com/projects/doctorow/picks-and-shovels-marty-hench-at-the-dawn-of-enshittification

It's a story of how the first seeds of enshittification were planted in Silicon Valley, just as the first PCs were being born.

Here's part one:

https://pluralistic.net/2025/01/09/the-reverend-sirs/#fidelity-computing

Part two:

https://pluralistic.net/2025/01/10/smoke-filled-room-where-it-happens/#computing-freedom

Part three:

https://pluralistic.net/2025/01/11/socialism-for-the-rich/#a-lighter-shade-of-mauve

Part four:

https://pluralistic.net/2025/01/13/wanting-it-badly/#discovering-e-discovery

Part five:

https://pluralistic.net/2025/01/14/contesting-popularity/#mister-25-percent

And now, onto part six – the thrilling conclusion!

I opened and shut my mouth. If the figures they’d discussed were real, then my billables would come out to a fraction of what I’d get if they got their way and absorbed CF. I reminded myself that I’d been ready to leave, to forgo all the money, just a moment before. But against that: the sense of how much I’d regret it if I took this deal, helped Fidelity Computing recapture their tearaway competitors, and picked up a mere $1,500, while five or ten times as much money could have been mine.

Imaginary regrets were no basis for doing business, I told myself. “That’s a deal,” I said.

Bishop Clarke clapped his hands together once. “I knew we could find a way to work together. How simply wonderful.”

“I can’t wait to see what you find,” Rabbi Finkel said.

“We pay net ninety,” Father Marek said. “The girls in payables can get you set up with an invoicing template.” He cupped his chin in one hand. “Which reminds me, I don’t suppose you have a Fidelity system, do you?”

“I’m afraid I don’t,” I said.

“That’s not uncommon, for a secular person,” Bishop Clarke said.

“We’ll loan you a refurb,” Father Marek said. “Stop by the loading bay after you speak to payables. Tell them I sent you. I’ll have my secretary call down to them.”

Shlomo came and got me and steered me out of executive row and back into the cavernous room where the customer-service reps murmured into their phones. They all stiffened as the door to executive row opened, and their conversations took on a hush.

I had a friend when I was growing up in San Diego, Marc Reyes. Marc’s father was an angry man, the kind of person who’d shout at his wife and kids even when there was a young stranger in the house. I’d seen him punch a wall hard enough to crack the plaster, over nothing—a failure to bring in the afternoon paper.

The hush in that bullpen took me back to the Reyes household, the tense silence that would fall over it when Marc’s father would come home.

I humped the banker’s box full of CF floppies through the bullpen and into the accounting department, where a middle-aged Orthodox man with sidelocks and a wide-brimmed hat gave me a floppy disk with an invoice template on it. I slipped it into the box, then put the box into the back of Art’s van, and drove around to the loading dock, where I signed for a quartet of battered cardboard boxes containing a Fidelity 3000 (their 386 system), a monitor, a printer, and two floppy drives.

I pointed the van back to Art’s place and put my foot down on the pedal.

Hey look at this (permalink)


A Wayback Machine banner.

This day in history (permalink)

#15yrsago ATM skimmer — could you spot it in the wild? https://krebsonsecurity.com/2010/01/would-you-have-spotted-the-fraud/

#15yrsago Italy proposes mandatory licenses for people who upload video https://web.archive.org/web/20100119020907/http://www.thestandard.com/news/2010/01/15/proposed-web-video-restrictions-cause-outrage-italy

#10yrsago Leaked US cybersecurity report singles out crypto as essential for security of private data https://www.theguardian.com/us-news/2015/jan/15/-sp-secret-us-cybersecurity-report-encryption-protect-data-cameron-paris-attacks

#10yrsago New editor at the Magazine of Fantasy and Science Fiction https://locusmag.com/2015/01/finlay-named-editor-of-fsf/

#5yrsago Five steps for thinking about climate change without being overwhelmed by hopelessness https://www.nytimes.com/2020/01/10/opinion/sunday/how-to-help-climate-change.html

#5yrsago The ten types of movie: orange and blue, sexy legs, blurry cop… https://twitter.com/leesteffen/status/1217167850009440257

#5yrsago American conspiracy theorists keep insisting on their right to trial by combat https://www.loweringthebar.net/2020/01/kansas-man-seeks-trial-by-combat.html

#5yrsago Major brands’ ads are showing up on climate deniers’ Youtube videos https://www.theverge.com/2020/1/16/21066906/youtube-climate-change-denial-avaaz-samsung-uber-nintendo

#5yrsago Hong Kong shoppers patronize “yellow” stores that support the uprising; while “blue” businesses that support the mainland are vandalized https://www.straitstimes.com/asia/east-asia/hong-kong-protest-shoppers-build-yellow-economy-reward-businesses-that-support-their

#5yrsago Carriers ignore studies that show they suck at preventing SIM-swap attacks https://www.issms2fasecure.com/assets/sim_swaps-01-10-2020.pdf

#5yrsago Bill from Missouri’s Rep Ben Baker threatens librarians with prison sentences for allowing minors to read books banned by town committees https://www.theguardian.com/books/2020/jan/16/missouri-could-jail-librarians-for-lending-age-inappropriate-books-parental-oversight-of-public-libraries-bill

#5yrsago Court case lays bare KPMG’s crimes: poaching employees from its own regulators and making them steal government secrets https://www.pogo.org/investigations/how-accountants-took-washingtons-revolving-door-to-a-criminal-extreme

#1yrago American education has all the downsides of standardization, none of the upsides https://pluralistic.net/2024/01/16/flexibility-in-the-margins/#a-commons

Upcoming appearances (permalink)

A photo of me onstage, giving a speech, holding a mic.


A screenshot of me at my desk, doing a livecast.

Recent appearances (permalink)


A grid of my books with Will Stahle covers..

Latest books (permalink)


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Upcoming books (permalink)

  • Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025

  • Enshittification: Why Everything Suddenly Got Worse and What to Do About It, Farrar, Straus, Giroux, October 2025
    https://us.macmillan.com/books/9780374619329/enshittification/

  • Unauthorized Bread: a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025


Colophon (permalink)

Today's top sources: Naked Capitalism (https://www.nakedcapitalism.com/).

Currently writing:

  • Enshittification: a nonfiction book about platform decay for Farrar, Straus, Giroux. Status: second pass edit underway (readaloud)

  • A Little Brother short story about DIY insulin PLANNING

  • Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS FEB 2025

Latest podcast: Picks and Shovels Chapter One https://craphound.com/overclocked/2025/01/10/picks-and-shovels-chapter-one/

This work – excluding any serialized fiction – is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

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