Trump Administration Escalates Pressure Over Foreign Tech Rules — Threats Without New Tariffs

The Trump administration has intensified pressure on foreign laws aimed at regulating large online platforms, while deliberately avoiding immediate tariff measures that could spark wider trade conflicts or unsettle markets.

Actions Taken

In the past month, U.S. officials paused negotiations on a tech pact with the United Kingdom, canceled a trade meeting with South Korean counterparts, and issued pointed warnings to European companies they say are being unfairly singled out by new digital rules. The Office of the U.S. Trade Representative (USTR) has publicly urged partners to roll back digital taxes on large online platforms and to revisit privacy-related rules that U.S. officials argue disproportionately affect American firms.

Strategy and Rhetoric

Several tech-policy experts and sources close to the White House describe the actions as a deliberate negotiating posture rather than the start of a broad trade war. As Everett Eissenstat, who ran the National Economic Council during Trumps first term, put it:

'It's telegraphing that we've looked at this deeply, we think there's a problem, we're looking at tools to address it and we're looking at remedies if we don't come to an agreement. Naming companies and signaling targets and tools is meaningful.'

USTR officials, led publicly by Jamieson Greer, have floated opening formal probes into unfair digital trade practices. Such investigations would give the U.S. a legal pathway to respond to foreign digital regulations deemed discriminatory. Greer has emphasized that any probe would be a negotiating tool aimed at reaching a negotiated outcome, not an automatic path to higher tariffs.

Limits and Industry Reaction

So far, the administration has steered clear of imposing new, sweeping tariffs or other aggressive measures that could unravel recent trade understandings or trigger market turbulence. That restraint has frustrated some U.S. tech companies, which are urging tangible action beyond public warnings.

A spokesperson for a major tech company, speaking on background, said industry observers see investigations as the next level of escalation: 'What people are waiting for is action beyond the tweets.' Yet others in industry worry that a full-scale dispute with the EU over digital rules could produce a damaging digital trade war that harms companies on both sides.

Diplomatic Friction and Specific Targets

Despite commitments in recent agreements — including a U.S.-EU understanding to address 'unjustified digital trade barriers' and a pledge against network-usage fees, plus language in a South Korea accord about non-discriminatory rules for platforms and cross-border data flows — none of the partner governments have abandoned their digital regulations.

Greer's office has warned it could take action against major European companies such as Spotify, Siemens, and Mistral AI if enforcement of EU digital rules continues as is. The warning followed an EU fine of $140 million against X (formerly Twitter) for failing to meet transparency requirements.

Greer also canceled a planned meeting with South Korean officials amid fresh digital-legislation activity and a contentious hearing into a data breach at Coupang. The South Korean Embassy said the Coupang hearing did not influence the scheduling of the KORUS Joint Committee meeting.

Next Steps And Stakes

Trade probes at USTR or targeted fines against specific foreign companies are being discussed as lower-escalation responses compared with broad tariffs. Such steps are legally complex and can take time to produce results, but they may give the administration leverage without immediately disrupting fragile trade relationships.

'At some point the administration has to put up or shut up. They need to put their money where their mouth is,' said Dirk Auer, a director at the Competition Policy International Center for Law & Economics, who has testified before Congress on digital services laws.

Gabby Miller contributed to this report.