Lawmakers and industry warn of rising digital trade barriers and call for stronger IP enforcement abroad
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Summary
Industry witnesses told the Trade Subcommittee that digital services taxes, data localization and asymmetric platform rules in multiple countries threaten U.S. digital firms and creative industries; they urged forceful trade remedies and multilateral engagement on IP and e-commerce rules.
Witnesses at the House Ways and Means Trade Subcommittee hearing urged the U.S. to use trade remedies and multilateral engagement to push back against a growing array of digital trade barriers, including digital services taxes (DSTs), data localization mandates and asymmetric platform regulation.
Jonathan McHale, vice president at the Computer and Communications Industry Association, told the panel his group is tracking discriminatory digital measures in more than 50 countries. "Digital services taxes ... cost U.S. companies billions of dollars annually," he said. McHale and other witnesses described how DSTs, forced revenue transfers and localization rules disadvantage U.S. firms and were particularly concerned that many governments, including allies, are adopting these measures.
Kevin Rosenbaum of the International Intellectual Property Alliance emphasized IP enforcement concerns: copyright industries, he said, contributed substantial value to the U.S. economy and face market access limits where partners do not fully implement agreements. Rosenbaum urged U.S. leadership at the World Intellectual Property Organization and at the World Trade Organization to preserve strong IP protections and to defend the e-commerce moratorium that prevents customs duties on electronic transmissions.
Members discussed enforcement options ranging from Section 301 actions and tariff responses to trade-preference criteria and using USTR's Special 301 process. Several participants urged the U.S. to remain active in multilateral settings to prevent fragmentation of Internet governance and to oppose regulatory models that could extract IP or require forced technology access.
Why it matters: The digital sector accounts for substantial U.S. services exports and jobs; witnesses said discriminatory foreign rules can shift investment and consumer access away from U.S. firms and raise compliance costs.
Ending: Members and witnesses voiced bipartisan concerns about digital barriers and pledged further oversight; the committee asked for written suggestions on specific enforcement steps and possible legislative responses.