This opinion piece is part of Access Partnership’s ‘A Digital Manifesto’ initiative, which recommends a framework to develop US global leadership on digital policy for the first 100 days of the Trump administration.
As the Trump administration takes office, securing digital trade must be a key priority. Over the past decade, digital trade has become an increasingly vital component of global commerce. For the United States (US), the export of physical goods through online platforms, alongside digitally delivered services such as information technology, financial, and professional services, has seen significant growth—supporting USD 520 billion of economic activity and 2.8 million local jobs annually. This helps reduce the trade deficit with key partners and create high-value-adding jobs for the US economy. Prioritising digital trade exports is, therefore, crucial to strengthening its economy, benefiting industries across all sectors .
The US has been a champion of digital trade by advocating for fair access and competition in international forums and treaties. However, the US’s stance on digital trade policy has shifted dramatically due to changing geopolitical considerations. In October 2023, the US withdrew support for World Trade Organisation (WTO) e-commerce negotiations, which aimed to facilitate cross-border data flows, ease data localisation restrictions, and prevent the forced transfer of source code. Additionally, the US Trade Representative (USTR) removed support for high-standard digital trade provisions in the trade pillar of the Indo-Pacific Economic Framework. Allowing other countries to take the initiative in digital regulation may expose US exporters to new trade barriers. Additionally, with import tariffs on goods as a cornerstone of the Trump administration’s trade policy, This poses a significant risk to US merchandise exports, threatening market access, economic growth, and domestic employment. Therefore, digital trade will become an even more important driver for overall trade by US companies.
We propose two key actions the Trump administration must take to safeguard market access for digital exports, regardless of its domestic tariff policies on goods.
Recommendation 1: Reassessing the US Policy Position for Digital Trade
A thoughtful reassessment of the US’s digital trade strategy can help ensure continued economic resilience, growth, and innovation.
The rationale for the US withdrawal from key digital trade negotiations has been the need for ‘policy space’ to develop domestic regulations. This includes prioritising stronger consumer and data protection laws to address privacy concerns and ensuring digital trade policies do not undermine labour protections or fair competition. While some argue that limiting digital trade agreements allows for stronger domestic regulations, suggests that both objectives can be pursued simultaneously. The WTO e-commerce negotiations, for example, are led by countries with highly sophisticated regulatory systems, such as Australia, Japan, and Singapore, along with other advanced economies including Canada, Chile, the European Union, Korea, New Zealand, Taiwan, and the United Kingdom. These economies have signed landmark digital trade agreements without compromising their ability to enact new domestic legislation.
Promoting policies that support the free flow of data while discouraging restrictive data localisation measures aligns with US trade interests, particularly as a global leader in e-commerce and digital services, such as cloud computing and artificial intelligence. Given the US’s strong position in the digital economy, maintaining cross-border data flows is essential to fostering innovation and ensuring competitiveness in the global market.
Recommendation 2: Work With Individual Trade Partners to Lower Non-Tariff Barriers for Digital Trade
Besides reducing barriers for digitally delivered services as part of Recommendation 1, the US would also benefit from efforts to seek reduced or eliminated non-tariff barriers (NTBs) from partners that apply to US digital .
NTBs can limit market opportunities for American exports while giving domestically produced goods an unfair competitive edge. These barriers can appear at the border, such as restrictive licensing and permitting requirements, as well as behind the border, including unnecessary technical regulations and sanitary or phytosanitary measures. Globally, NTB compliance costs add roughly 12% to the cost of exports, amounting to billions of dollars for US exporters, such as e-commerce merchants and digital technology providers (like cloud computing and AI). The US should commit to preventing and reducing unnecessary NTBs in digital trade , establish mechanisms for regular dialogue, and seek opportunities to open markets for American firms.
Additionally, some partners have increasingly imposed restrictions on public procurement for foreign firms and mandated local content requirements in manufacturing and services, which have impacted exports of intermediate inputs by US exporters. To address these challenges, the US should actively advocate for the benefits of open markets, emphasising that trade is not a zero-sum game but an opportunity for mutual economic growth and cooperation.
The Way Forward
Securing the future of US digital trade requires a strategic and forward-thinking approach. By reassessing its digital trade policies and reinforcing partnerships to reduce non-tariff barriers, the US can strengthen its position as a global leader in digital trade and ensure that American industries and workers remain competitive in an increasingly digital world. As global trade evolves, the US must embrace policies that foster innovation and economic opportunity, reinforcing its commitment to a strong, resilient, and prosperous digital trade future.
Access Partnership helps clients unlock the potential of digital trade through expert analysis and strategic guidance. We work with policymakers and businesses to shape effective digital trade strategies, enabling sustainable growth in an increasingly digital-first global economy. Our expertise ensures clients navigate complex regulations and harness digital tools for success.
To learn how we can support your digital trade ambitions, please contact Abhineet Kaul at [email protected].
