President Trump said in a Truth Social post earlier this week that he will stand up to countries that attack U.S. tech companies. “Digital Taxes, Digital Service Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology,” he said. “They also, outrageously, give a complete pass to China’s largest Tech Companies.”
The president is right on both of those counts, and his timing wasn’t coincidental. His post came during South Korean President Lee Jae-myung’s visit to the White House. The message was unmistakable: Discriminatory policies targeting American tech companies will face “substantial additional Tariffs” and restrictions on “Highly Protected Technology and Chips.”
Korea should pay attention to Trump’s admonition. Its proposed Platform Competition Promotion Act copies the EU’s Digital Markets Act playbook by imposing special rules on Internet “gatekeepers,” which are predictably defined to capture American firms while exempting domestic competitors. The law would authorize penalties of up to 10 percent of a company’s global revenue—potentially amounting to billions of dollars from leading American tech companies that are in the midst of a tech race with China.
As ITIF has warned repeatedly, Korea’s digital regulations risk derailing U.S.-Korea trade relations precisely when both allies need to cooperate against China. Yet Korean policymakers appear to be engaging in a “bait and switch”: pausing their obviously targeted Platform Monopoly Act (PMA) after U.S. pushback while advancing an equally harmful Online Platform Fairness Act.
President Trump’s warning suggests the administration won’t fall for that tactic. Other countries are already getting the message. Canada scrapped its Digital Services Tax after Trump threatened tariffs. India eliminated its “Google Tax.” These countries recognized that unfairly taxing or fining American tech companies isn’t sustainable when America pushes back.
Korea now faces a clear choice between abandoning discriminatory policies disguised as domestic regulation or risking losing access to American semiconductors and advanced technologies on which its own tech sector depends. Trump’s warning offers Korea an opportunity to demonstrate it values the strong U.S.-Korea alliance and won’t allow it to be undermined by non-tariff attacks on American companies.
Other U.S. trading partners should do the same: Abandon discriminatory digital policies and work toward fair, reciprocal trade relationships. The alternative (tariffs and tech restrictions) would hurt both sides and create a world of opportunity for China.
