Tariffs Aren't the Problem

It's trade partners who put their thumb on the scale

The rent was coming up, and I didn't have it.

The dotcom boom had come and gone, and my little company was struggling. I'd let the few employees I had go. A few years earlier, I'd come up with an idea for a new way to search data, wrote some software, and started selling it. It did ok for a while. But small companies always struggle against bigger ones in the software business, and I needed a deal.

A lead came in over the website. A Canadian telephone company wanted to put their yellow pages online, and needed a good search engine. It was a perfect fit.

We had a call, and then more calls. I gathered requirements and gave advice. They asked for a few features and I scrambled to add them. Things looked good.

Still, they weren't sure, and requested some kind of demo. They sent their data. I spent days and nights building a demo site, sweating over the details. It was fast and it was beautiful and it met the requirements. They were impressed.

Still, it was a big telephone company, and they had procedures to follow. They wanted to meet. Using money I didn't have, I booked a flight to Regina, Saskatchewan in the middle of winter. I booked the cheapest hotel I could find.

Canada was an experience. Bitter cold I'd never experienced. Nice people. The same music everywhere, the same songs over and over again, far worse than top 40 radio in the U.S. Gordon Lightfoot on a continuous loop.

I met the client, a nice, older IT middle-management type who was getting close to retirement. The meetings went well. They needed a bit more, we negotiated a price, and it was a go -- he just needed approval. I went home.

Days, and then weeks, passed. I called frequently, but couldn't get a response.

Eventually I got the client on the phone, and he apologized profusely. They had rules they had to follow, including one that said that if a Canadian company could supply what they needed, they had to buy local. They had found a company in Toronto that had a search engine, not quite as good, but they had to go with it. He was very, very sorry.

I'm sure the Toronto company found my demo useful in designing their own system.

I lost the deal because of a Canadian law that takes business from American companies and gives it to Canadian companies. It's called a non-tariff barrier. It's a form of cheating.

Donald Trump has been talking about this kind of cheating for a long time. He has raised tariffs on countries worldwide, and the current reports are that everyone is coming to the table to make a deal. The EU has proposed a zero-for-zero tariff plan -- you drop yours, and we'll drop ours.

It's not going to work, because tariffs aren't the problem. The problem is the myriad, overt, and sometimes not-so-overt barriers that keep American companies at a disadvantage. The barriers that jerk Americans around, take their intellectual property, and leave them with a "we're very sorry".

This is a hard problem to solve, and it's going to take time. Trump's tariffs need to stay in place for a while while we get rid of the worst of the cheating. And there needs to be continued enforcement and penalties to control the underhanded tricks. Sometimes the barriers are baked into the culture.

Remember that repetitive music on Canadian radio? I learned that Canadian radio stations have a rule that a certain percentage of their playlist has to be Canadian artists, and there just aren't that many of them. A struggling Canadian artist gets airplay. A struggling American artist, not so much.

To this day, I can't hear "The Wreck of the Edmund Fitzgerald" without thinking about the wreck of our trade relations and that time I couldn't pay the rent.