If there is one bright spot in Trump’s trade threats, it is that the conversation on how to improve the global regulatory space for the average consumer has been recalibrated.
President Trump’s tariff-heavy trade agenda is quickly proving unpopular with Americans, which might explain why the administration worked overtime to rebrand tariffs as “liberation” from foreign partners who treated the United States unfairly. As part of the narrative switch, Trump’s team has at least one clever weapon that could ultimately serve to defend and strengthen free trade and innovation between the US and its allies like the European Union.
By framing any punitive regulation or excessive fine issued by foreign countries against U.S. firms as a legal device that “restricts, prevents, or impedes international trade,” President Trump has made a fresh case for how digital regulation and international diplomacy should work in the twenty-first century.
This idea is more interesting and impactful than many people may realize.
As anyone who casually observes the stock market can tell you, the U.S. economy is now bound at the hip with the fate of its technology companies. At a conservative estimate of 9 percent of GDP, our nation’s powerhouse tech firms based in Silicon Valley, Austin, and New York City have become a daily presence in our lives. For better or for worse, President Trump has taken notice.
In a pair of presidential memoranda issued in February, Trump announced new measures to evaluate restrictive trade practices hamstringing U.S. tech firms abroad. Trump might not love or fully trust Big Tech. Still, he’s extended the umbrella of America-First to them anyway, vowing to fight “one-sided, anti-competitive policies and practices of foreign governments” that target the likes of Meta, Amazon, Google, Netflix, Apple, and others.
While the idea of reciprocal tariffs should make any economist queasy, we should pay special attention to the details of the Trump administration’s policies.
One memorandum mentions that, beginning in 2019, many trading nations enacted Digital Service Taxes (DST) that “foreign government officials openly admit are designed to plunder American companies.” The document also invokes the “extortive fines and taxes” that exist to “prop up failed foreign economies.”
Though the executive orders don’t mention the specific laws or fines by name, one can safely intuit the reference of several regulations enacted in the European Union, namely the Digital Services Act (DSA) and the Digital Markets Act (DMA), as well as the so-called “link tax” efforts in Canada and Australia.
Regulators in Brussels have ratcheted up the enforcement of these regulations and haven’t let up now that President Trump has turned up the heat on trade.
In March, the European Commission declared three separate violations of the DMA against Apple, Meta, and Google, threatening as much as 10 percent of global revenue for each of the tech behemoths. The violations relate to various aspects of self-preferencing on platforms, advertising consent rules, and interoperability as mandated by European legislation.
What matters about Trump’s framing of these issues is that he views these regulatory actions as harmful not just to American innovators but to the global economy and consumers as a whole. The EU’s regulatory regime has morphed into a diplomatic issue.
Rather than just Meta vs. the EU or Apple vs. Brussels, Trump has taken it upon himself to view it as a broader United States vs. European Union regulatory fight. As a strategy, it is having some impact.
EU Trade Commissioner Maroš Šefčovič told an audience in Washington that the commission was open to a “dialogue on big tech,” while playing down claims of discrimination against American companies.
Just a few weeks later, during a review of the European Commission’s “Omnibus” package, regulators inserted several amendments to ease ESG and sustainability reporting requirements on global firms with operations in the EU.
Reversing years of the European rulemaking process will be next to impossible. Still, these subtle pivots are a glimmer of hope that the EU and the United States can work together again on tech and innovation.
At home, U.S. firms still face a hostile climate in Washington. Trump comes to their defense against antagonism abroad, only to dispense with the “Good Cop” routine and continue litigation against companies like Amazon and Google for alleged antitrust violations. The FTC lawsuit against Meta’s acquisitions of Instagram and WhatsApp over a decade ago will have its first court hearing next month. At the same time, a judge reviews remedies to force Google to sell off its popular Chrome browser.
It is hardly consistent for Trump to fend off all foreign regulatory threats and tariffs against American tech while subjecting them to punitive lawfare in our own courts that will only harm consumers who like these products and services. At the same time, a trade war won’t help anyone.
If there is one bright spot in Trump’s cacophony of trade threats, it is that the conversation on how to improve the global regulatory space for the average consumer has been recalibrated.
The ability to change the conversation has always been Trump’s most clever weapon, and it is providing a great opportunity to refine our tech and trade relationships for the better.
Yaël Ossowski is Deputy Director at the Consumer Choice Center.
Image: Joshua Sukoff / Shutterstock.com.