Dear Chairman Smith and Ranking Member Sanchez,

We, the undersigned, represent a broad coalition of independent policy experts, civil society organizations, and trade associations with a shared view that America must maintain global leadership in technology and innovation, particularly as China aggressively seeks to become preeminent. We therefore commend your leadership in examining the role of trade policy in maintaining American innovation and technology leadership, and we urge the Subcommittee on Trade to build on its January 13 hearing on that topic by undertaking further hearings to investigate the growing wave of non-tariff attacks (NTAs) that governments around the world have launched against U.S. technology companies. There is an urgent need to ensure that Congress and the Administration have the requisite policy tools at their disposal to identify, document, prevent, and respond to these measures.

NTAs represent a new category of trade restrictions spreading globally, and traditional trade policy frameworks fail to address them adequately. They can take the form of nonmarket mechanisms such as digital services taxes (DSTs); extraction measures such as disproportionate fines and forced infrastructure investments; precisely targeted regulatory thresholds coupled with selective enforcement; and offensive measures to degrade U.S. firms’ competitive advantages and extract their proprietary assets. Unlike conventional tariffs or familiar non-tariff barriers (NTBs), NTAs are disguised as legitimate domestic policies but they weaken specific U.S. firms and industries, extract resources from them, and attempt to assert strategic control over their technological capabilities. NTAs are narrowly tailored measures that restrict U.S. firms’ ability to innovate and compete on level terms, thereby undermining American technology leadership at the expense of U.S. economic and national security in the geostrategic competition with China.

Given the scope, scale, and strategic intent of non-tariff attacks, a broader and more systematic examination is needed to fully understand their economic and national security implications and to ensure U.S. policymakers are equipped with the tools necessary to respond effectively.

What Makes Non-Tariff Attacks Different

Congressional hearings are warranted because NTAs represent a fundamentally new challenge that existing trade frameworks were not designed to address:

▪ They exploit regulatory legitimacy. Foreign governments weaponize domestic policy tools—competition policy, data privacy regulations, cybersecurity requirements—to target U.S. firms while maintaining plausible deniability. The EU’s Digital Markets Act (DMA) exemplifies this, as its “gatekeeper” criteria, while theoretically neutral, in practice target five U.S. companies and their services. 

▪ They scale beyond traditional protectionism. The EU alone extracted $6.7 billion in fines from U.S. tech companies in 2024. That’s equivalent to one-fifth of its entire tariff revenue. These aren’t incidental regulatory costs; they represent systematic revenue extraction from American firms into foreign treasuries.

▪ They are proliferating globally. What began as an EU strategy has metastasized worldwide. EU-style policies are now coming into effect across dozens of countries, from the UK’s DMA copycat, the DMCC, to proposed similar approaches in Brazil, Australia, Turkey, and Korea. With some of these laws explicitly targeting U.S. companies, like India’s Digital Personal Data Protection Act that singles out U.S. firms as “data fiduciaries” to Japan’s restrictions on American smartphone software providers.

▪ They strike at innovation itself. By forcing technology transfers, restricting pro-competitive product integrations, mandating data localization, and imposing compliance burdens that divert R&D spending, these policies don’t just restrict market access, they deliberately erode the innovation capacity that underpins U.S. technological leadership.

U.S. Economic and National Security vs. China

NTAs demand Congressional attention because they undermine U.S. technological leadership and thereby degrade America’s strategic position vis-à-vis China. As Xi Jinping has stated, “technological innovation has become the main battleground of the global playing field.”^[1] Yet while the United States has implemented targeted export controls and investment screening to protect critical technologies from China, U.S. allies and partners are systematically weakening the American tech companies that provide a key competitive advantage.

The strategic consequences are severe:

▪ Technology transfers benefit China. When the EU forces U.S. companies to share algorithms, localize data, or restructure operations, Chinese (and other) competitors can gain insights that would otherwise require billions in R&D.

▪ Market fragmentation helps China. Policies that force U.S. platforms to balkanize their operations undermine their competitive advantage, network effects and global scale—the very features that have allowed American companies to outcompete China’s state-backed champions.

▪ Weakened companies lose ground. Resources diverted to regulatory compliance and fine payments are resources not invested in AI, quantum computing, and other frontier technologies where U.S.-China competition will be decided.

Perversely, countries implementing these policies often harm their own interests, damaging small businesses dependent on platform access and innovation ecosystems while inadvertently strengthening China’s technological position.

The Case for Congressional Hearings

It has been encouraging to see that the Administration clearly recognizes the threat that foreign regulatory attacks pose to U.S. technology leadership and is taking action to address them. For example, President Trump posted on social media in August that, “Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology… They also, outrageously, give a complete pass to China’s largest Tech Companies.”^[2] More recently, Commerce Secretary Lutnick and U.S. Trade Representative Greer pressed European counterparts to reassess EU digital regulations to ensure they are balanced in their treatment of U.S. tech companies.^[3] 

The recent framework of trade agreements that the Administration has negotiated with several countries has addressed some NTAs. For example, the recent Korea Strategic Trade and Investment Deal establishes a commitment by the South Korean government to ensure that “U.S. companies are not discriminated against and do not face unnecessary barriers in terms of laws and policies concerning digital services.”^[4] However, South Korean policymakers have consistently pursued new discriminatory policies against U.S. companies, so it remains to be seen whether they will stop.

But while trade policy levers such as tariffs can be effective to some extent, they are not sufficient to address the full range of non-tariff attacks that foreign governments are mounting. There is an urgent need for a detailed strategic framework, including processes for identifying and assessing NTAs; engaging and negotiating with foreign governments; and countering and deterring undue attacks on American tech firms.

Toward that end, we urge the Subcommittee to hold hearings to examine policy solutions that are already at the Administration’s disposal, to identify gaps where new legislation is warranted, and to demonstrate bipartisan resolve in defending American technological leadership.

What Hearings Can Accomplish

Hearings are needed to fully examine the scope, impact, and remedies for non-tariff attacks on U.S. technology leadership. The Subcommittee can bring forward testimony and recommendations from affected industry representatives, current and former officials, and leading experts to inform the development of legislative, administrative, and oversight tools needed to monitor and respond to these growing threats.

Accordingly, hearings should:

▪ Build the factual record to document the scope, mechanisms, and impact of non-tariff attacks on U.S. tech firms and industries, including compliance costs, forced transfers, and competitive harms to specific U.S. firms; broader strategic implications for U.S.-China industrial competition; and gaps in current trade policy frameworks.

▪ Evaluate existing policy tools by assessing expert recommendations, such as: reciprocal enforcement authorities; coordination requirements for USTR, Commerce, State, and other U.S. agencies; criteria to distinguish legitimate regulation from discriminatory measures; and systematic monitoring and tracking mechanisms.

▪ Develop legislative remedies, such as: statutory definitions and monitoring requirements for non-tariff attacks; enhanced enforcement authorities; mandatory reporting on discriminatory foreign regulations; and funding for robust tracking tools.

▪ Establish ongoing oversight mechanisms, including: regular reporting on emerging non-tariff attacks; metrics to evaluate U.S. government response effectiveness; structured channels for expert and industry input; and accountability measures for interagency coordination.

Conclusion

Non-tariff attacks on U.S. technology leadership are not a theoretical future threat. They are happening now, accelerating rapidly, and the cumulative effect is measurable erosion of U.S. technological advantages.

This threatens not only American economic interests but our national security position in the defining strategic competition of our era. Congressional action would elevate this challenge and give it the attention it deserves, build the foundation for effective policy responses, and demonstrate American resolve to defend our technological leadership.

The Subcommittee’s hearing on January 13 effectively lays the groundwork to address this issue. We, the undersigned individuals and organizations, respectfully urge you to convene further hearings at your earliest opportunity to focus attention directly on the problem of non-tariff attacks on leading U.S. technology firms.

Respectfully,

Cosigned

Endnotes