U.S. Should Confront Non-Tariff Attacks Against American Tech Firms

Forbes

2 days ago

I recently explained in Forbes that Trump trade negotiators could leverage the planned
TOPSHOT - US President Donald Trump smiles during a phone conversation with Mexico's President ... More Enrique Pena Nieto on trade in the Oval Office of the White House in Washington, DC on August 27, 2018. President Donald Trump said Monday the US had reached a "really good deal" with Mexico and talks with Canada would begin shortly on a new regional free trade pact."It's a big day for trade. It's a really good deal for both countries," Trump said."Canada, we will start negotiations shortly. I'll be calling their prime minister very soon," Trump said.US and Mexican negotiators have been working for weeks to iron out differences in order to revise the nearly 25-year old North American Free Trade Agreement, while Canada was waiting to rejoin the negotiations. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)
withdrawal of anticompetitive federal regulations to obtain a cutback in foreign anticompetitive market distortions (ACMDs) that harm American firms and consumers.
A July 2 nonpartisan letter to senior Administration officials from the Information Technology and Innovation Foundation (ITIF), joined by senior policy scholars, strikes a similar theme in calling on the Administration to target foreign governments' non-tariff attacks (NTAs) on America's leading technology companies. The letter recommends a 3-pronged negotiating approach to counteract NTAs. Administration initiatives along the lines suggested by the letter could bestow substantial benefits on U.S. producers, workers, and consumers.
The NTA Problem
As the letter explains, a new form of trade restriction is emerging that existing legal frameworks fail to address: non-tariff attacks (NTAs). NTAs are a specific type of ACMD that is growing in significance.
Unlike traditional tariffs or known non-tariff barriers (NTBs), NTAs are disguised as legitimate domestic policies. Their true purpose is to target leading U.S. technology firms, undermine innovation, extract financial and intellectual assets, and weaken America's strategic position in the global tech race.
Three features distinguish NTAs from traditional NTBs:
As the U.S. seeks to rebalance trade relations, rolling back these unfair practices should be a top priority in negotiations. The ITIF has documented over 100 cases where U.S. trading partners have adopted policies aimed at limiting American tech firms' operations or siphoning their revenues.
The European Union led this effort with its Digital Markets Act (DMA) and Digital Services Act (DSA), which targeted major U.S. firms while largely sparing local competitors. In 2024 alone, regulatory fines on American companies in the EU totaled nearly $6.7 billion. Other countries are following suit: Brazil with similar regulations, India targeting U.S. firms under its data protection law, and Japan restricting dominant U.S. smartphone platforms.
Although often framed as consumer protection, privacy, or digital sovereignty, these policies impose selective burdens that disadvantage American firms and empower foreign rivals. They also often harm the enacting countries themselves by disrupting ecosystems that support small and medium-sized businesses dependent on global platforms.
These attacks also pose national security risks. U.S. tech firms are vital to innovation and defense sector competitiveness. By diverting investment from R&D, mandating tech transfers, or exposing sensitive capabilities, NTAs erode the strength needed to compete with China's state-led technology push.
The consequences are severe:
This problem is most pressing in the U.S.-China context. While America applies overt targeted measures like export controls, other nations exploit NTAs to undermine U.S. firms more subtly and effectively. These tactics distort markets far more powerfully than tariffs and shift global leadership toward China just as the U.S. needs unity and strength.
Policy Recommendations
Addressing NTAs is essential for preserving U.S. technological strength, protecting national interests, and maintaining U.S. leadership in the global digital economy. Current trade negotiations present a golden opportunity to confront the growing NTA threat and reinforce the foundations of American innovation and security.
Keep in mind that NTAs do more than just harm American industry and national security – by harming our high tech companies, they present broad threats to overall American welfare.
High tech firms are hugely beneficial to the American consumer. They provide high-quality, low-cost services to Americans (think Google or YouTube), are a huge sector in our economy, create jobs and wealth for Americans at large, and drive innovation that improves lives and the American consumer experience.
In sum, countering NTAs is key to maintaining a dynamic, innovative U.S. economy.
Appropriately, the ITIF letter highlights 3 vital criteria for confronting the NTA problem:
1. Make NTAs a top agenda item in all trade negotiations.
2. Secure binding agreements to block discriminatory digital regulations.
3. Set up systems to detect and respond to emerging NTAs.
The Trump administration may wish to consider making these suggestions key features of its trade negotiating strategy. Success in rooting out NTAs would be a 'win-win-win' for American firms, workers, and consumers.