U.S. federal agencies are taking steps to protect American companies from discriminatory taxes and regulations in foreign markets. This move follows an executive order by President Trump, directing the Administration to investigate practices targeting U.S. digital exports.
The Executive Order titled "Defending American Companies and Innovators From Overseas Extortion and Unfair Fines and Penalties" mandates the Office of the U.S. Trade Representative to review digital services taxes abroad. In coordination with the Department of Treasury and Department of Commerce, it will also investigate regulations that could inhibit the growth or operation of U.S. companies, threaten intellectual property, or undermine global competitiveness. The order also aims for a permanent moratorium on customs duties on electronic transmissions with trading partners and reviews policies in the European Union and United Kingdom concerning online expression.
The Computer & Communications Industry Association (CCIA) has advocated against discriminatory measures affecting U.S. suppliers in foreign markets. Recently, CCIA released its priority list of digital trade barriers based on extensive research into obstacles faced by U.S. digital products and services globally.
In Congress, efforts are underway to enhance U.S. exports further. CCIA’s Vice President for Digital Trade, Jonathan McHale, is set to testify at a House Ways & Means Committee subcommittee hearing on “American Trade Enforcement Priorities.” Digital trade contributes $655.5 billion annually to U.S. services exports, playing a crucial role in counterbalancing the goods trade deficit.
McHale expressed support for the Administration's actions: “We are encouraged that the Administration plans to take action and investigate the range of discriminatory and burdensome measures affecting U.S. digital firms in key foreign markets." He added that CCIA looks forward to collaborating with the Administration to promote cross-border trade in digital products and services.
Ahead of his testimony, McHale noted: “For too long our trading partners’ discriminatory taxes or regulations have gone unchallenged and we appreciate the attention to digital trade, which is a bright spot in countering the trade deficit." He highlighted CCIA's tracking of measures across 54 countries concerning cloud computing restrictions, data localization requirements, discriminatory service taxes, and platform regulations.
