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By Audrey Hingle —

Who Are the Winners of Tariff Diplomacy?

Who Are the Winners of Tariff Diplomacy?
Photo by Karthik Balakrishnan / Unsplash

This week, Burcu Kilic, tech policy expert and senior fellow at the Center for International Governance Innovation, describes how U.S. tech companies are framing international regulatory efforts as threats to American innovation, and using tariffs as a strategic tool to advance their policy priorities in global trade negotiations.

But first...

Reading List: Bias in AI

Much of the public conversation about AI focuses on speculative risks, but the technology is already reshaping our world in real and harmful ways. From automating discrimination in hiring to enabling surveillance and undermining labour rights, AI is impacting lives now.

We teamed up with our Signal community to curate a reading list exploring the multifaceted harms of AI. When you buy through our shop, 10% of the purchase price supports Internet Exchange.

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From the Group Chat đź‘Ą đź’¬

This week in our Signal community, we got talking about:

  • Was DOGE a front to steal government data for AI training?
  • We discussed a new report from the U.S. Copyright Office: Copyright and Artifical Intelligence. https://www.copyright.gov/ai/Copyright-and-Artificial-Intelligence-Part-3-Generative-AI-Training-Report-Pre-Publication-Version.pdf Some points that came up:
    • The current clash between Big Tech and Big Content over AI training leaves independent creators and the public caught in the middle.
    • AI companies argue that using copyrighted content falls under “fair use” or the “right to research,” but in the case of AI training, this is commercial exploitation, not legitimate public interest.
    • Some academics and open web advocates frame any pushback on unrestricted web crawling and data scraping as anti-research, while industry (especially Google) quietly funds the “right to research” narrative.
    • The broader concern: Big Tech is co-opting public interest language to justify massive data grabs, echoing past copyright battles but with new messaging.
    • A more sustainable alternative may be to establish tort-based legal remedies that initially benefit larger rights holders but can later enable smaller creators to organize and assert their rights outside the Big Tech vs. Big DRM binary.

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The Winners of Tariff Diplomacy: U.S. Tech Companies 

By Burcu Kilic. Adapted from a version originally published in the Carr-Ryan Center for Human Rights’ "Trump’s First 100 Days in Office" report.

Tech Companies Push to Reframe Reinstated Tariffs

In recent years, the U.S. tech companies have grown increasingly vocal in opposing foreign policy measures promoting fair competition, protecting consumers, or reinforcing national sovereignty. They often frame such regulations as undermining “fair competition” in foreign markets and argue that they are “discriminatory” and “place a disproportionate burden” on large U.S. companies. Within the American tech and trade circles, these regulatory efforts are widely seen as a “coordinated assault “on American tech companies.

Since his early days in office, Trump and his administration have characterized foreign tech regulations as “very unfair,” often framing them as barriers to U.S. economic interests and global competitiveness. In February 2025, Trump signed a memorandum to defend American companies and innovators from what he called “overseas extortion”. The memo warned that the administration would consider responsive actions like tariffs against digital service taxes, fines, practices, and other foreign policies targeting American companies. 

Now, tech companies are lobbying to frame recently reinstated American tariffs as market-correcting mechanisms designed to penalize distortive behavior and level the regulatory environment for American companies. They argue that protecting American tech companies from “unfair foreign regulation” goes beyond defending American companies; it is also about safeguarding American technological leadership, particularly in strategic competition with China. 

That’s why, when the European Commission fined Meta 200 million euros over its controversial “pay or consent” model, which forces EU users to either pay for ad-free access to Facebook and Instagram or consent to targeted advertising, Meta’s reaction was to call the fine “a multibillion-dollar tariff on Meta” in an absurd attempt to grab the White House’s attention. Crying foul over the ruling, the company complained that the EU was unfairly targeting American businesses while allowing Chinese and European companies to operate under different standards. The White House took the bait and quickly echoed Meta’s argument, denouncing the fines as “extraterritorial regulations that specifically target and undermine American companies” and framing them as a barrier to trade. 

The Trump administration faces a tight three-month window for negotiating tariffs with more than 70 countries. This puts significant pressure on U.S. trade officials to prioritize both issues and the trading partners. The tech industry, in particular, has presented a long list of countries and regulatory issues it wants trade negotiators to address. It appears that Trump’s White House is preparing for an unprecedented pushback against foreign tech regulations, seeking formal commitments to reduce these so-called non-tariff barriers within a specific timeframe.

The Political Power of Tariffs

Since President Trump took office, tariffs have become a daily topic. Tariffs mean different things to different people, and reactions often reflect varied socio-economic realities. 

To die-hard neoliberals, tariffs signal an existential threat to the global trade system, designed to reduce or eliminate tariffs and create free markets, promoting the interests of U.S. multinational corporations. For anyone tied to that system, such as free market economists, trade lawyers, or companies relying on complex global supply chains, the reintroduction of tariffs marks the end of an era. 

On the other hand, many ordinary Americans, particularly those who have suffered under neoliberal trade policies, the loss of manufacturing jobs, and the ripple effects on their families and communities, generally support tariffs (at least until very recently). For them, tariffs signal that someone is finally listening, acknowledging their struggles, and taking action to reclaim what has been lost. Just before the U.S. presidential election, a survey found that 56% of Americans favored raising tariffs, with support increasing to 58% among non-college-educated voters in Michigan, Wisconsin, and Ohio. For many in these communities, decades of global trade policies have turned them into passive consumers of low-tariff or tariff-free cheap goods, at the expense of their jobs, livelihoods, and the survival of their communities. 

That’s why Trump made tariffs a central part of his agenda. On his first day in office, he directed U.S. economic agencies to investigate “unfair foreign trade” practices. The review was due on April 1st. The very next day, on April 2, celebrated as “Tariff Liberation Day”, Trump announced sweeping tariffs ranging from 10% to 49% applied to every country. Tariffs were even extended to remote islands where only penguins live. 

Tariff Liberation Day was not received well. It sent financial markets into turmoil and effectively lit the global economy on fire. Yet in reality, tariffs can serve as an essential economic tool if used in the proper context and supported by complementary policies. Strategic tariffs are often viewed as part of a broader industrial policy toolkit. 

The Neoliberal Trade Order

Historically, all industrialized nations have relied on some combination of tariffs and industrial policies to build and foster domestic industries. However, beginning in the 1980s, these policies were replaced by free market principles prioritizing privatization, deregulation, minimal government intervention, reduced market oversight, and weakened antitrust enforcement. 

Multinational corporations took full advantage of this shift, relocating their operations to lower-cost countries. They profited not only from the offshoring of U.S. jobs and cheap labor abroad but also from the liberalization of foreign markets and the dismantling of local regulations. At the same time, they built intellectual property monopolies over essential medicines, technology, books, and educational materials. In the end, workers both in the United States and abroad suffered. American workers lost their manufacturing jobs, communities, and economic security, while workers in other countries worked longer hours for lower wages under poor conditions, only to pay more for their medicines, books, and other essential goods. 

The global free trade system was a clear win-win for multinational companies. So, when President Trump introduced the tariffs, the markets did not take it well. There was a complete meltdown across global economic circles. The backlash has been so intense that Trump was forced to pause tariffs for 90 days, giving his trade officials time to negotiate with trading partners while launching a trade war with China in response to Chinese retaliation. 

The U.S. Built the Global Trade System. Now It’s Tearing It Down on New Terms  

As of now, tariffs are on hold. Over 70 countries have reportedly approached the Trump administration to negotiate, offering concessions in exchange for tariff exemptions. The U.S. had long championed a rule-based global trade system, granting preferential tariff-free market access to other countries in exchange for market liberalization, deregulation, and intellectual property monopolies. Then, almost overnight, it reversed course, raised the tariffs, disregarding these very trade rules it had helped create.

In this new landscape, tariffs became a powerful bargaining chip. U.S. trade officials could now leverage the size of the American market to push for the removal of long-standing tariff and non-tariff barriers and demand further concessions. Countries that enjoyed tariff-free access to the U.S. market found themselves under pressure to offer more to maintain the status quo. 

While much public discussion focuses on foreign tariffs and trade deficits, non-tariff barriers are just as significant. The United States Trade Representative (USTR) broadly defines non-tariff barriers as government laws, regulations, policies, or practices that distort or undermine “fair competition”. 

Tariff Diplomacy: Who Benefits? 

While tariffs were initially framed as a tool to restore manufacturing jobs and support American workers, U.S. tech companies have increasingly shaped the narrative, shifting the purpose of tariffs in the process. By casting tariffs as market-correcting mechanisms meant to penalize distortive behavior and level the global regulatory playing field, these companies have reframed tariff diplomacy as a means of defending their interests. Their sustained opposition to foreign tech regulations has positioned non-tariff barriers at the center of trade negotiations and turned Trump’s trade policy into a tool for advancing the strategic priorities of Big Tech abroad.

Just last week, the U.S. announced a new deal with the United Kingdom, followed by another agreement with China this week. Both serve as frameworks for future negotiations. The U.S. now has 90 days to negotiate a comprehensive deal with China. While the terms remain ambiguous, the U.K. and the U.S. have agreed to negotiate an ambitious digital trade agreement. Meanwhile, negotiations are ongoing with Indonesia, South Korea and Taiwan, where deals reportedly appear to be close and some non-tariff barriers are said to be on the table. 

It remains to be seen which countries will concede and which will resist. However, history seems to be repeating itself; once again, the elimination of tariffs appears designed to serve corporate interests rather than ordinary Americans. This time, the cost may not be measured in lost jobs but in the unchecked growth of surveillance capitalism along with the loss of our privacy, rights, and democracy.

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