Mastodawn

Ivo Stružinský Dec 29

Zhi Zhu 🕸️

"there is a better way to respond to #tariffs. Tit-for-tat tariffs are a 19th-century tactic, & we live in a 21st-century world—a world where the most profitable lines of #business of the most profitable #US companies are all vulnerable to a simple #legal change that will make things cheaper for billions of people, all over the #world, including in the US, at the expense of the companies whose CEOs posed w/ #Trump on the inaugural dais."
- @pluralistic

https://www.wired.com/story/us-trade-dominance-will-begin-to-crack/

Zhi Zhu 🕸️Dec 29

"In 2026, countries that want to win the #TradeWar have a unique historical possibility: They could repeal their “anticircumvention” laws, which make it illegal ...to modify devices & services without permission from their manufacturers...

The world’s govts agreed to protect this racket in exchange for tariff-free access to #American markets.👉 Now that the #US has reneged on its side of the bargain, these laws serve no useful purpose"👈
https://www.wired.com/story/us-trade-dominance-will-begin-to-crack/

#Politics #Law #Tech #News #Press

Zhi Zhu 🕸️Dec 29

"In 2026, many countries will respond to #tariffs like they were still in the 19th century. But a few countries will have the vision, the boldness, & the political smarts to kick #DonaldTrump right in the dongle...

Retaliatory tariffs ...punish Americans ... indiscriminately, ...inflicting far more pain on soybean farmers than they do on the CEOs of the #tech companies that back #Trump.

Repealing anticircumvention #law is a targeted strike on America’s most profitable companies"

txtx 🇪🇺Dec 29

@ZhiZhu Agriculture business in the US supports Trump so I'm not bothered if it hurts soybean farmers and it's not my problem [speaking as a European here].

Retaliatory tariffs aren't used to punish Americans; they're used to make the US administration think twice about placing more tariffs on exports from the EU, Canada, etc.

txtx 🇪🇺Dec 29

@ZhiZhu While updated anti-circumvention laws are an interesting idea, Europe giving John Deere and other industrial firms an advantage over our local companies by ignoring tariffs would destroy perfectly good EU industries and jobs.

Why should we shoot ourselves in the foot here?

@txtx @ZhiZhu why not both?

txtx 🇪🇺Dec 29

@antinomian @ZhiZhu Both is fine.

Jargoggles Dec 29

@txtx @ZhiZhu
The biggest stranglehold John Deere has on farmers is the fact that it's a black box that they're not even allowed to service or modify themselves. That's where they make their money.

If an overseas company shipped third-party software that farmers could load on their John Deere equipment, that would be a *devastating* blow to the company. Hell, if they gave it away for free, they could make John Deere implode basically overnight.

txtx 🇪🇺Dec 29

@jargoggles @ZhiZhu

Ok but you're an EU farmer and now you can buy a brand new John Deere and service it as you wish?

That makes John Deere products *more* appealing to European farmers – not less.

It'd be a double blow to European farm equipment builders: because of Trump tariffs, EU equipment costs a lot to import into the US. Meanwhile, John Deere & co get a free pass into the EU because we don't do retaliation.

Yikes.

Jargoggles Dec 29

@txtx @ZhiZhu
John Deere isn't going to be much of a competitive threat if the company collapses. They've become extremely dependent on locking customers in. If they lose that, they'd need to completely restructure the business and lose a significant amount of market share in the process.

txtx 🇪🇺Dec 29

@jargoggles @ZhiZhu

Farmer lock-in is one thing. But I'm talking about EU farming equipment manufacturers like CLAAS, Fendt, Case New Holland etc. having unfair competition from the US due to the Trump tariffs.

EU manufacturers (along with their unionized workers) getting shut down so that farm business owners — who generally support right-wing authoritarians like Trump and his European equivalents — get a better deal?

I support what @pluralistic is saying but this I don't understand.

Jargoggles Dec 29

@txtx @ZhiZhu @pluralistic
My point is that if John Deere's profit center gets cut out from under them, it's going to significantly hurt their ability to produce and sell products. That's going to provide a ton of opportunity for other manufacturers to steal that business.

Think of it this way, John Deere is planning to make *10%* of their revenue just from software fees alone by 2030: https://www.theregister.com/2022/09/12/deere_software_revenues/

I mean, even if it was just that by itself, can you imagine how completely and utterly fucked *any* company would be if they lost that much of their business? Their ability to stay competitive would get tanked just from the restructuring alone.

Now consider the fact that software fees aren't just a standalone part of the business. John Deere's entire pricing model is dependent on the fact that they can force customers into those high margin software fees. Then, of course, there's all those overpriced service and maintenance fees they can charge because the software means nobody else can work on the equipment.

John Deere doesn't know how to make a profit off a tractor anymore. You know who does? Every other goddamn tractor company. And even with tariffs, you're only paying those once instead of having to constantly shell out cash for the entire lifetime of the product.

So, sure, John Deere equipment will be very attractive to farmers if they can jailbreak it, but why in the hell would John Deere keep selling it if it's not making them any money?

Software fees to make up 10% of John Deere's revenues by 2030

1.5 million machines and half a billion acres of land connected to the John Deere Operations Center within a matter of years

The Register

Cory Doctorow Dec 29

@jargoggles @txtx @ZhiZhu

Nonsense.

Deere isn't using these rents to hire people, do R&D, source material, pay dividends, or even to pay executive bonuses.

They are pissing >100% up the wall on financial engineering:

https://www.financecharts.com/stocks/DE/cash-flow/repurchase-of-capital-stock

Jargoggles Dec 29

@pluralistic @txtx @ZhiZhu
I'm not saying any of that. My whole point is that they've put themselves in a position where losing control of the software that runs on the equipment they sell would utterly fuck their profitability.

And I was just talking about how it affects the fundamentals of their business. The fact that their vendor lock-in has made them complacent and fixated on propping their stock price up with buybacks would make this even more devastating to their business.

That 85% margin on software fees lets them do a lot of financial fuckery. I can't see how they would keep the stock price inflated without it.

Depending on how the government responds, it could be a straight up death spiral.

txtx 🇪🇺Dec 30

@jargoggles If American farmers have issues with John Deere, they're going to have to figure that out for themselves and maybe stop voting for monopoly-supporting politics. I'm not against them doing something about it but I'm not going to hold my breath here.

While that story is ongoing, in the meantime, the EU shouldn't be giving a helping hand to US agriculture and manufacturing industries to the detriment of ours by ignoring US tariffs..

Jargoggles Dec 30

@txtx
How on earth is that what you took away from what I said?

Again, the entire point I'm making is that this would allow other manufacturers, including European companies, to steal a significant amount of John Deere's market share.

txtx 🇪🇺Dec 30

@jargoggles The proposal in question is to simultaneously A) not introduce retaliatory tariffs so as to not hurt US soybean farmers and B) create anti-circumvention regulations instead.

If one separates these two points, that's a different matter. But as long as we're discussing under this context, my argument is perfectly precise.

Jargoggles Dec 30

@txtx
You have point B completely backwards. The proposal is to *repeal* anti-circumvention regulations that currently prohibit other countries from modifying American companies' devices or services without permission.

txtx 🇪🇺Dec 30

@jargoggles let's call them new anti-anti-circumvention laws if you prefer. I think that's clearer.

The EU already has a right-to-repair framework for agricultural equipment. So we don't need to repeal anti-circumvention laws that don't exist.

Jargoggles Dec 30

@txtx
Oh my god, how are you still missing the point by this much? The anti-circumvention laws don't have to do with European-made products or services!

In return for not getting punitive tariffs, the EU has respected the integrity of the products and services of *American* companies. However, because the US is imposing those tariffs anyway, the gloves can come off. European companies would be able to blow a gigantic hole in the bottom line of many American companies and then steal their market share because they can undercut the fuck out of them.

What don't you understand about that?

txtx 🇪🇺Dec 31

@jargoggles Which EU regulation gives US companies like John Deere special privileges for their anti-circumvention measures that European manufacturers cannot use?

(Rhetorical question, there is no such law to repeal of course)

txtx 🇪🇺Dec 31

@jargoggles It seems we're coming at this thing from two very different perspectives in either case, so I'll leave it at that on my end.

el Celio 🇪🇺 🇺🇦Dec 29

this is part of the so-called "nuclear option" that from time to time comes out of EU meetings talking about trade with the USA.

the idea is to do not directly harm trade with the USA with tariff (which is very XIX century stuff), but remove some of the legal protection on intellectual property that US tech companies enjoy (and results in decade-lasting rents).

normand 🚴Dec 29

@ZhiZhu this would be awesome. But I doubt there will be many countries with legislators brave enough to do it. Or free of economic ties to those big US companies...

@ZhiZhu Do they get their presents back? Rolex, gold bars, etc?