CNN reports that some of Trump's early tariffs might be used to fight foreign digital regulations:
The campaign has commissioned its own studies on the economic impact of these tariffs, with levies not far below the levels Trump has suggested, according to people familiar with the effort.
Some more targeted tariffs could be implemented sooner, these sources say. Trump has weighed a tariff on electric vehicles manufactured overseas, kvetching about how cheap Chinese electric vehicles are, compared to US EVs. And Trump’s advisers have expressed frustration with countries – like Canada and the European Union, for instance – that have slapped US tech companies with new taxes on their overseas profits, and retaliation could come soon.
“That’s directly in response to something the EU has already done,” one source said. “The EU is robbing US tax base. There’s a general view that the [broader] tariffs will come later.”
(emphasis added)
I have written about the issue of digital trade barriers in the context of some proposed Korean digital regulations (with a Korean colleague who has actual expertise on these regulations!). One of the underlying points I had in mind in that context was that, in my view, a core purpose of the world trading system is to discipline protectionism, and thus a situation where a domestic regulation merely has a disparate impact on foreign products/services is not necessarily a problem. In other words, disparate impact alone is not sufficient to find that the regulation violates trade rules. To determine whether such a regulation is a problem, I would look at the objective intent of the regulation (i.e., its design, structure, etc.). (As current U.S. Trade Rep. Katherine Tai once put it, "we have to really be cognizant that measures that may look like they have a discriminatory effect may or may not be advanced with a discriminatory intent.")
My sense is that many people in the trade policy field agree with this view, at least in broad terms, although there are quibbles about whether to look at intent as part of the obligations or the exceptions, as well as over what specific test should be used to determine the intent.
On the other hand, I also have the sense that some people -- and importantly, people who are likely to be setting trade policy in the Trump administration -- have a different view of how to assess digital regulations. For them, at least in the context of U.S. companies selling abroad (I'm not sure how they see things when foreign companies are selling in the U.S.), if a foreign regulation has a disparate impact on U.S. companies, that is sufficient cause for the U.S. government to take action. And in the case of these particular digital regulations, the U.S. action seems likely to be unilateral.
For me, this approach leads to concerns about policy space or regulatory autonomy or sovereignty (or whatever your preferred term here is). I don't think the people who support this approach are as worried as I am though, and as the CNN article indicates, we may see early action here. (An alternative explanation is that they do, in fact, worry about these things, but in the context of the digital regulations in question, they believe they have evidence of the protectionist intent of the foreign governments. I have not seen that evidence presented though.)
Beyond the big picture questions about the appropriate scope of the trading system as it applies to domestic regulation, a practical question in relation to the Trump administration's response to foreign digital regulations is whether unilateral action will be effective in dissuading the foreign governments from adopting these regulations. From what I can see, unilateral action has not had a good track record in recent years (or in long ago ones). However, if the Trump trade folks go ahead with it on this issue (and others), we'll have more data to analyze so that we can make an assessment of exactly how effective it is these days.
ADDED:
Just to clarify, the CNN piece only mentions digital taxes, but in my previous writings on this subject linked to above, you can see former Trump administration trade officials explicitly targeting digital regulations. For the purposes of this post, I've lumped the taxes and regulations together.
