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Honestly, most of the incentives aren't aligned with breaking them up or trying to lower prices. If the large corporate entities were broken up, they wouldn't h

Honestly, most of the incentives aren't aligned with breaking them up or trying to lower prices. If the large corporate entities were broken up, they wouldn't have the scale to compete against their much larger American counterparts. They'd either get pushed out or bought up. And low prices aren't the goal for a company that is protected by government policies - they'll aim to maximize profits within the policy framework instead, and the framework itself does the job of preventing competition from smaller upstart rivals. Think of the Canadian aircraft manufacturer Bombardier. Canada wants to keep a domestic aircraft manufacturer around so they have a backup in case of US shenanigans (like what just happened with the F-35) so the government ensures there's ongoing contracts for those domestic aircraft as well as subsidies for things like manufacturing plant expansion or modernization. But Canada's population only needs so many aircraft, so why would they waste government resources on a new upstart rival aircraft manufacturer? Bombardier knows this too, so why would they spend their own resources on R&D or modernization when they know they can get the government to pay for it instead? It's a feedback loop, and not necessarily a good one.

badc0ffee 21d ago
De Havilland is another Canadian aircraft manufacturer, and is expanding massively right now. But I suppose they serve a different, simpler market than Bombardier.
- digdugdirk 21d ago
  Kinda? Originally a Canadian subsidiary of a British company, privatized in the 80's, then sold to Boeing, then bought back by Bombardier with big financial support from the Ontario government, then sold off to a domestic buyer in a corporate restructuring. Their big commercial aviation product is an old Bombardier design. To your point - Even as domestic "competition", the market is still separated by aircraft type. And honestly, their history is a good example of why countries act in this way. When they were sold to Boeing, it seemed to be a way for Boeing to "grease the wheels" in order to land a big Air Canada contract. When Airbus got the contract instead, Boeing immediately put De Havilland up for sale and let the company languish until it was purchased by Ontario/Bombardier. Corporate histories can be interesting!
ericmay 21d ago
Thanks - informative comment. It really seems like Canada is in a tough spot economically. They don't have the scale to compete against, say, China or the United States but they want to protect domestic industries against foreign competition and so have enacted trade barriers and other protectionist policies like supporting Bombardier (or the dairy industry or whatever) even if it means higher prices for Canadiens and goes against free trade practices. In my mind that makes a lot more sense as to why, at least in part, there is the ongoing trade dispute between the US and Canada (whether I agree or disagree with it and how it is handled would be a different matter). The US also seeks to in part protect domestic industries that are being outcompeted by China or face significant regulatory barriers (diary industry in Canada for example, other various exports to the EU, Chinese ban on American technology companies) and so we're winding up in a world where the US is now also putting the hammer down on protecting industries like the EU, China, and seemingly Canada does which is causing a lot of political conflict over trade and jobs. It seems inevitable that as one or more countries put up trade barriers (EU, Canada, China being some large ones here) the US and others would eventually respond if they found that they were unable to compete on price due to government intervention.
- JauntTrooper 21d ago
  The US also has significant agriculture subsidies. Most developed countries do. In dairy, for example, if prices get "too low", the US directly buys excess supply to increase the price, makes direct payments to dairy farmers, and subsidizes feed (corn/soybeans) and farmers' insurance. Most historical trade agreements between the US and friendly nations tolerated minor interventions and subsidies on both sides. Trump is taking a completely different tact. His goal is not free trade or sustainable relationships. He recognizes the US is the stronger party in most of these negotiations, and wants to use that to extract concessions that explicitly favor the US, even if it strains and damages the economies of historical allies.
  - ericmay 21d ago
    Right, my understanding is that the US along with most developed countries provide agricultural subsidies and/or tariff agricultural products from other countries or provide other formal or informal trade barriers. Makes sense, in a way, as you need to keep your agricultural base if you have one. It seems logical that this could extend to other industries, car manufacturing, weapons/missiles, semiconductors, other various technologies. Healthcare. You get the picture. But I think your comment about Trump is not quite nuanced enough and of course you have to include that the US is negotiating with other powerful parties like the EU and China so it's not really always the US negotiating with weaker parties. At the negotiating table I view each of those big 3 has having many cards to play, and both weaknesses and strengths that can be exploited. When I say it's not nuanced enough what I mean is that, for example, American technology companies are simply banned from operating in China. In Europe, until I believe July or something American car exports were tariffed at a 10% rate, and then you have policies like the Online Streaming Act in Canada (I'm not exactly up to date on the current status but just recall it existing). So while Trump's negotiating style is, arguably something to abhor, I think painting these engagements as simply a matter of Donald Trump isn't interested in free trade or sustainable relationships to be a bit off the mark. For example, you can't simultaneously claim that Donald Trump isn't interested in free trade while ignoring trade barriers put in place before he was even elected president. I'd also argue that in general most countries and people aren't actually interested in free trade and that it's more of a political tool, because that would require abandoning subsidies and protections and there are obviously very bad potential repercussions of doing so.

badc0ffee 21d ago

De Havilland is another Canadian aircraft manufacturer, and is expanding massively right now. But I suppose they serve a different, simpler market than Bombardier.

digdugdirk 21d ago
Kinda? Originally a Canadian subsidiary of a British company, privatized in the 80's, then sold to Boeing, then bought back by Bombardier with big financial support from the Ontario government, then sold off to a domestic buyer in a corporate restructuring. Their big commercial aviation product is an old Bombardier design. To your point - Even as domestic "competition", the market is still separated by aircraft type. And honestly, their history is a good example of why countries act in this way. When they were sold to Boeing, it seemed to be a way for Boeing to "grease the wheels" in order to land a big Air Canada contract. When Airbus got the contract instead, Boeing immediately put De Havilland up for sale and let the company languish until it was purchased by Ontario/Bombardier. Corporate histories can be interesting!

ericmay 21d ago

Thanks - informative comment. It really seems like Canada is in a tough spot economically. They don't have the scale to compete against, say, China or the United States but they want to protect domestic industries against foreign competition and so have enacted trade barriers and other protectionist policies like supporting Bombardier (or the dairy industry or whatever) even if it means higher prices for Canadiens and goes against free trade practices. In my mind that makes a lot more sense as to why, at least in part, there is the ongoing trade dispute between the US and Canada (whether I agree or disagree with it and how it is handled would be a different matter). The US also seeks to in part protect domestic industries that are being outcompeted by China or face significant regulatory barriers (diary industry in Canada for example, other various exports to the EU, Chinese ban on American technology companies) and so we're winding up in a world where the US is now also putting the hammer down on protecting industries like the EU, China, and seemingly Canada does which is causing a lot of political conflict over trade and jobs. It seems inevitable that as one or more countries put up trade barriers (EU, Canada, China being some large ones here) the US and others would eventually respond if they found that they were unable to compete on price due to government intervention.

JauntTrooper 21d ago
The US also has significant agriculture subsidies. Most developed countries do. In dairy, for example, if prices get "too low", the US directly buys excess supply to increase the price, makes direct payments to dairy farmers, and subsidizes feed (corn/soybeans) and farmers' insurance. Most historical trade agreements between the US and friendly nations tolerated minor interventions and subsidies on both sides. Trump is taking a completely different tact. His goal is not free trade or sustainable relationships. He recognizes the US is the stronger party in most of these negotiations, and wants to use that to extract concessions that explicitly favor the US, even if it strains and damages the economies of historical allies.
- ericmay 21d ago
  Right, my understanding is that the US along with most developed countries provide agricultural subsidies and/or tariff agricultural products from other countries or provide other formal or informal trade barriers. Makes sense, in a way, as you need to keep your agricultural base if you have one. It seems logical that this could extend to other industries, car manufacturing, weapons/missiles, semiconductors, other various technologies. Healthcare. You get the picture. But I think your comment about Trump is not quite nuanced enough and of course you have to include that the US is negotiating with other powerful parties like the EU and China so it's not really always the US negotiating with weaker parties. At the negotiating table I view each of those big 3 has having many cards to play, and both weaknesses and strengths that can be exploited. When I say it's not nuanced enough what I mean is that, for example, American technology companies are simply banned from operating in China. In Europe, until I believe July or something American car exports were tariffed at a 10% rate, and then you have policies like the Online Streaming Act in Canada (I'm not exactly up to date on the current status but just recall it existing). So while Trump's negotiating style is, arguably something to abhor, I think painting these engagements as simply a matter of Donald Trump isn't interested in free trade or sustainable relationships to be a bit off the mark. For example, you can't simultaneously claim that Donald Trump isn't interested in free trade while ignoring trade barriers put in place before he was even elected president. I'd also argue that in general most countries and people aren't actually interested in free trade and that it's more of a political tool, because that would require abandoning subsidies and protections and there are obviously very bad potential repercussions of doing so.