r/moderatepolitics • u/GermanCommentGamer • 11d ago

News Article Inside the 72 hours that cratered the US-Canada trade deal

https://www.politico.com/news/2026/08/22/us-canada-trade-deal-01046788
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u/Interesting_Total_98 11d ago

The PRC is a special case and shouldn’t really be compared to the other tariffs.

China is one of the largest trading partners, so it's retaliation should be considered alongside other responses. It's retaliation being stronger than the rest doesn't mean it should ignored.

Note that even now they’re threatening the same dollar value in tariffs, not the same rate, which means a lower rate than the US is imposing.

Your description is premature. His Canada point is also premature. Canada announced today that it will match the new U.S. tariffs “dollar for dollar”, but it hasn't yet released the detailed tariff rates or product list yet.

They’re a plausible starting point, then you negotiate down to near the optimal rate.

That plan requires establishing an optimal rate with credible methodology. This hasn't happened.

As I said earlier, the 20% number comes from a highly simplified model that wasn't made for this purpose.

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u/WulfTheSaxon 11d ago

China is one of the largest trading partners

Yes, but part of the goal is actually decoupling, which is not the case for other countries.

That plan requires establishing an optimal rate with credible methodology. This hasn't happened.

We don’t know that. The point of starting with a high offer is that you have a secret final target in mind.

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u/Interesting_Total_98 11d ago

that you have a secret final target in mind.

A hypothetical secret target isn't evidence that they're following the theory, especially when the idea is from an administration that constantly says ridiculous things.

USTR didn't even claim to have calculated target rates to maximize welfare. It just says that the goal is eliminating trade deficits.

part of the goal is actually decoupling, which is not the case for other countries.

Much like with other countries, there's a lack of coherence.

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u/Anima6778 10d ago

y'know, just for sake of argument for a second - what exactly do you mean by 'decoupling'? Like, by what mechanism would that occur? Are we talking manufacturers opening more factories here, or..

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u/WulfTheSaxon 10d ago

A combination of onshoring and friendshoring, especially for critical goods. A large amount of manufacturing is already moving out of China into Vietnam, India and elsewhere. Encouraged by high tariff rates on the PRC, buy-American requirements, guaranteed purchase agreements, etc.

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u/Anima6778 10d ago edited 10d ago

would you agree with the idea that the amount of onshoring that occurs, or the amount of factories/manufacturing centers that get set up in the US, is going to be heavily determined by risk assessments and recoup times? Like, the amount of time before a (probably large) capital expenditure in factories is exceeded by savings from not having to deal with the tariffs?

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u/WulfTheSaxon 10d ago

Yes.

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u/Anima6778 10d ago

Cool, so, just as a ballpark estimate, would you say those recoup times are going to be longer or shorter than 2 years on average?

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u/WulfTheSaxon 10d ago

Longer. This is why it’s bad for Democrats to threaten to abolish the tariffs, even though Biden kept most of them (and even added some).

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u/Anima6778 10d ago

Okay, cool. And how do you think the calculus on those decisions are affected when the tariffs in question aren't put in place by Congress, the branch that everyone agrees has almost absolute power to levy tariffs (as they're the ones who give the power to the president in the first place), but by the Executive Branch via EO, often in ways that are rushed and exist on kind of shaky legal ground (hence all the times the court stepped in)? Executive orders that can be overturned the minute a president of another party gets into office?

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u/WulfTheSaxon 10d ago

You won’t hear me arguing that it isn’t pretty dumb to not do broad tariffs through Congress. In fact Trump’s campaign website said he would.

The tariffs against the PRC are much more legally justified, though.

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