Tariffs and inflation
Hello, so here is my, this is going to be my rant on tariffs and inflation, a little bit of my thoughts going into this. So my background, I sell a digital product online and I have a lot of Canadian and European customers. I have customers around the world, significant business outside the United States. So as soon as the idea of tariffs came down, I started looking into it and saying, well, I guess I'm going to have to read the USMCA and I guess I'm going to have to look at Canada's list of retaliatory tariffs that they're putting on goods from the United States. I guess I'm going to have to really consider what do I do if the US puts a tariff on Canada or Mexico or the EU and the retaliatory tariff applies to my product. So digging into this, the good news, I guess, is that the USMCA prohibits any sort of tariff on digital goods and additionally digital goods are a tricky thing to apply tariffs to, they don't cross a border, they don't go through the regular customs procedures. So it's really hard to envision electronic goods without a prolonged trade war or a really, really strong effort from one side of the other. It's hard to imagine digital goods being targeted specifically because they'd be the most difficult thing to apply tariffs to, we don't have the agencies and mechanisms to tariff these goods right now. It looks like neither does Canada, Canada doesn't have, there's like a form you can fill out if you owe GST on goods, purchase to broad, so I guess there's kind of a mechanism, and it's not for other, there isn't a specific tariff on digital goods, so that's unclear how it would work. But the real issue isn't actually paying the 25%, I will discount my customers 25%, whatever. I can get around that, the real issue is the impact that it has on customers in the EU and Canada who are considering purchasing from a US company at all and they, the confidence in purchasing from US companies is going to road, if we start throwing tariffs up, will annoyingly to every single country, we have any sort of significant trade deficit with. It's more about confidence, so I think what I need to do is create some kind of messaging or marketing campaign around how we don't like tariffs and we pay the tariffs and also we give you a discount because you had to pay tariffs, I don't know. And the thing is, is the negative impact from to US suppliers in Canada and EU will happen even if digital goods are never targeted by tariffs. Companies will start to internally tell their procurement teams and tell teams that they need to be hesitant about buying from US companies if they 're alternatives because of tariffs. So as soon as we start a trade war, you're going to start seeing negative effects of this. And everybody says, oh, this is inflationary, small nitpick on definitions. The term inflation is widely misused. Inflation is supposed to refer to what we're now going to start calling monetary inflation. This is supposed to be purely a monetary construct. One of the important parts of it being a monetary construct and not a price construct is that inflation is the effect of market dynamics, I guess.
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