President Trump’s ‘Reciprocal Tariffs’ are nothing but a shakedown on behalf of Big Tech
On April 2, 2025, President Trump announced the imposition of so-called ‘reciprocal tariffs’ on a number of countries. These tariffs were later suspended for a period of 90 days, allegedly to allow countries to negotiate deals with the Trump administration.
While many have pointed to the flawed logic of Trump’s approach, what is equally troubling is that President Trump now expects countries to line up to curry favor with his administration in exchange for favorable ‘deals’ – which the administration will negotiate behind closed doors with no oversight by the public or Congress. This provides an opportune moment for corruption, something that many Democratic leaders and watchdog organisations are already warning of. In fact, President Trump’s own statements appear to indicate that corruption is the primary motivation behind these closed-door negotiations.
What’s in it for Big Tech?
While the exact nature of the concessions President Trump will demand of foreign countries is still unclear, what is undoubted is that these negotiations will be used to bully countries to deregulate the technology ecosystem. This is evident from Trump’s tariff announcement on April 2, where he vigorously waved around the US Trade Representative’s 2025 National Trade Estimates (NTE) Report – what he referred to as a ‘special book’ – directly linking the supposed “non-tariff barriers” identified by the report and the imposition of purported “reciprocal tariffs.”
This underscores that tariffs are being used as a coercive tool to prevent countries from enacting regulations that could affect the profits of Big Tech. The administration is basically pushing countries to give up public interest regulation of the digital ecosystem to serve the bottom lines of US tech companies.
What is President Trump’s ‘Special Book’?
The United States Trade Representative (USTR) publishes the National Trade Estimates report (NTE) annually to identify non-tariff barriers to trade imposed by foreign jurisdictions against American companies.
The NTE report is usually a laundry list of corporate complaints against public interest regulations imposed by foreign countries. Unlike the 2024 NTE report, which acknowledged that governments have a sovereign right to regulate the digital ecosystem in public interest, this year’s report lists a host of laws and policies that countries have adopted to do just that. These legitimate policies have been listed as “trade barriers” simply because U.S. Big Tech companies find them objectionable – as can be seen from the comments submitted to the USTR and the joyous reception to the release of the report by industry associations.
What Are the Digital Trade Barriers Identified in the NTE Report?
The NTE report lists a wide variety of supposed “digital trade barriers” – despite the fact that virtually all of them have a legitimate public policy rationale and apply to companies of any country.
Examples of Digital Trade Barriers Identified in the 2024 and 2025 NTE Reports:
| Issue | Number of Jurisdictions | Jurisdictions | 2024 NTE Report |
| Data localization | 27 | Algeria, Bangladesh, Brazil, Chile, China, Ecuador, Egypt, El Salvador, EU, Saudi Arabia, UAE, India, Indonesia, Israel, Kenya, South Korea, Mexico, Nigeria, Norway, Pakistan, Panama, Peru, Switzerland, Russia, Turkiye, Uruguay, Vietnam | 4 jurisdictions identified – Russia, El Salvador, China, Pakistan |
| Digital services tax | 8 | Canada, Colombia, EU, India, Kenya, Nigeria, Turkiye, UK | 6 jurisdictions identified – Canada, India, EU, Kenya, Turkiye, UK |
| Revenue sharing | 3 | Australia, Canada, EU | – |
| Digital competition regulations | 4 | China, EU, Japan, South Korea | – |
| AI regulation | 1 | EU | – |
Accordingly, the report targets a host of policies that have been in Big Tech’s crosshairs for some years. These include:
- laws that impose conditions or restrictions on cross-border data transfers: a number of countries implement data protection or privacy regulations that permit foreign transfers of personal data only if the foreign jurisdiction provides an adequate or equivalent level of protection to the data. However, the NTE report unthinkingly lists all such regulations as barriers to trade.
- laws that seek to enhance competition in the digital ecosystem: The monopolisation of various sectors of the online economy creates competition related problems which can affect smaller businesses and consumers. Jurisdictions such as the EU, South Korea, and Japan have all implemented some form of pro-competition regulation in the digital ecosystem, with a number of other countries such as India and Brazil expected to do so in the near future. These laws are falsely claimed to be specifically targeted at U.S. companies.
- regulations that require large digital platforms to share revenue: Certain large digital platforms rely on but at the same time cannibalize traditional industries such as news providers. Jurisdictions such as Australia and Canada have implemented laws requiring these platforms to enter into revenue sharing arrangements with traditional industries.
- regulations that require platforms to ensure online safety: Several countries have implemented regulations that require platforms to remove access to illegal or harmful content.
- digital services or similar taxes: Many countries are unable to appropriately levy income tax on Big Tech companies when they do not have a physical presence within their borders. The lack of global consensus on the issue of how to tax multinationals has forced a number of countries to apply digital services taxes (DSTs). Limiting the ability to appropriately tax Big Tech companies promotes inequality and hurts the developmental goals of many poorer nations.
A shakedown on behalf of Big Tech?
The 90-day pause on ‘reciprocal tariffs’ is quite simply a form of coercion on behalf of Big Tech. If countries acquiesce to U.S. demands to deregulate the tech ecosystem, they may be spared from “retaliatory tariffs.” Unfortunately, it appears a number of countries are prepared to negotiate away their digital ecosystem policies in the face of pressure from the Trump administration:
- India announced the end of an “equalization levy” applied to advertising revenues earned by foreign digital platforms.
- Australia is seemingly going slow on implementing its media bargaining code that requires large platforms to share revenue with news producers.
- The UK and Canada have indicated they are willing to give up implementation of digital services taxes.
More recently, the EU has indicated that it could water down obligations under the flagship General Data Protection Regulation (GDPR), as well as Artificial Intelligence Act (though these changes appear equally motivated by the need to increase competitiveness of European tech firms), while India has suspended the mandatory testing of certain imported telecom equipment.
An Open Door to Corruption
A number of reports have already speculated on the possibility of officials from the Trump administration being involved in insider trading, market manipulation and cronyism. The close ties between the Trump administration and Big Tech companies are already well known. In addition to making large campaign contributions, Big Tech companies were some of the first to line up to “kiss the ring.” Clearly they expect something in return – and President Trump hasn’t disappointed.
Taken together with domestic deregulatory actions such as the firing of Federal Trade Commission members, as well as a number of eyebrow raising remarks about the profits he has helped Big Tech to make, there is little denying that President Trump is batting for Big Tech interests even when they are in direct conflict with domestic consumer and public interests.
While the US continues to be a critical trading partner, as demonstrated by reports of a number of jurisdictions, most recently the EU, seeking to pen trade deals with the Trump administration, they must be wary of entering into agreements that would involve ceding ground on critical public interest regulations. Not only could it hurt their citizens and economies by deregulating the technology space, but there is also no guarantee that any concessions made will actually end the bullying by the U.S. Despite many countries indicating their willingness to make concessions to the US, they were nonetheless subjected to so-called reciprocal tariffs. Administration officials have also made it clear that the US wants more than the reduction of tariffs – they want global deregulation of the tech ecosystem.
In the medium to long-term, this may be a bit of a self-goal for the US administration. Rather than opening up foreign markets to US tech companies, the inconsistent and short-sighted actions of the Trump administration may just set the stage for global entrenchment of the “digital sovereignty” narrative, leading to more countries reducing their dependance on American digital services.