from Hacker News

Ask HN: Do the tarrifs impact software/SaaS? If so, how?

by xeckr on 2/2/25, 5:06 AM with 47 comments

Will it be more difficult to sell software or SaaS across the border between Canada and the US?

  • by walterbell on 2/2/25, 6:13 AM

    Tariffs on physical goods can be enforced during physical movement, e.g. a shipment crossing a border. Cross-border taxation of digital services is more complex. Canada introduced a unilateral DST (Digital Services Tax) in 2024, which the US is challenging under USMCA, https://www.canada.ca/en/services/taxes/excise-taxes-duties-...

    This article claims that digital services are not subject to direct US tariffs, https://www.codemastersinc.com/post/impact-of-u-s-tariffs-on...

    > DIGITAL SERVICES: While traditional industries face direct tariff impacts, digital services are also encountering challenges. Many Canadian tech firms provide software, consulting, and cloud-based solutions to U.S. clients. The uncertainty surrounding trade relations has led some American companies to reconsider long-term contracts with Canadian providers. Additionally, potential retaliatory measures from Canada could further complicate cross-border data exchange and intellectual property regulations. Despite these concerns, digital businesses may still have an advantage due to their ability to operate remotely and pivot towards new markets with relative ease.

  • by fuzzfactor on 2/2/25, 5:52 AM

    >Will it be more difficult to sell software or SaaS across the border between Canada and the US?

    That's one intended outcome.

    OTOH, people in both countries may be financially hosed bad enough, that way more people will never be able to afford things other than bare necessities for the rest of their lives anyway.

  • by killingtime74 on 2/2/25, 6:12 AM

    Of course they will affect Software or SAAS. We don't know how yet since retaliation tariffs have not all been finalised/levied yet. Remember tariffs are not just unilateral from the US.

  • by KeithBrink on 2/2/25, 9:42 AM

    Not any kind of expert, but from my research, Article 19.3 of the USMCA says that tariffs can't be imposed on digital products:

    1. No Party shall impose customs duties, fees, or other charges on or in connection with the importation or exportation of digital products transmitted electronically, between a person of one Party and a person of another Party.

    The full chapter on digital trade: https://ustr.gov/sites/default/files/files/agreements/FTA/US...

  • by nejsjsjsbsb on 2/2/25, 7:06 AM

    What about contracting? Hourly rates? Employment?

  • by dismalaf on 2/2/25, 9:01 PM

    Probably but with how weak the Canadian dollar is you can probably just eat the cost (assuming you're Canadian selling to the US).