Four Key Moments: Hearing on Maintaining American Innovation and Technology Leadership

WASHINGTON, D.C. - Under President Trump, the United States is once again fighting for and advancing pro-American and pro-innovation trade policies, witnesses shared at a Ways and Means Trade Subcommittee hearing on strengthening digital trade and intellectual property (IP) rights, and the importance of securing meaningful commitments from our trading partners in these sectors. Witnesses consistently applauded the Trump Administration for its bold, unapologetic stance in support of American technological supremacy - with one witness calling the Trump Administration's approach a "welcome change" from the Biden Administration's abandonment of digital priorities in trade. A combination of strong laws at home and fair treatment from trading partners abroad is key to protecting continued American leadership in technology sectors critical to the U.S. economy and national security.

The proliferating trend of foreign nations trying to turn American technological prowess into revenue streams for their governments requires a strong, direct response. Stronger IP protections and policies that recognize the importance of America's technology leadership are needed to maintain the immense contribution IP-intensive industries make to the U.S. economy. In 2019, these industries generated 41 percent of U.S. gross domestic product and accounted for 63 million jobs, nearly half of all U.S. employment.

Digital Trade Matters for More Than Technology and Intellectual Property

Digital trade impacts far more than the online world, technology companies, and IP interests. As Trade Subcommittee Chairman Adrian Smith (NE-03) noted in his opening statement, in an economy increasingly shaped by digital tools, foreign taxes on innovation hurt American farmers, manufacturers, producers, and small businesses.

Rep. Adrian Smith (NE-03): "When we create an environment conducive to innovation, all sectors succeed. New agriculture crop varieties and inputs meet the need for affordable and nutrient-dense staples around the world. Pharmaceutical development delivers life-saving advancements. Small businesses have access to a suite of digital services to market their products at home and abroad. When trading partners unnecessarily target American innovation and technology, the trickle down effect is similarly felt throughout the economy."

Trump Administration Tackling "Global Free Riding Problem" Head On

Weak IP protections in foreign countries permit those nations to unfairly benefit from American innovation at the expense of American workers, businesses, and consumers. President Trump and his Administration have already successfully secured key commitments from trading partners that will ensure that American IP is protected and respected in foreign countries. In the realm of digital trade, the Administration reversed course on the Biden Administration's surrender of American digital leadership and eliminated discriminatory taxes, such as Canada's digital services tax (DST).

Chairman Jason Smith (MO-08): "What are the most impactful commitments on respecting American IP that the Trump Administration has already secured from our trading partners and where do you see gaps that still need to be addressed?"

Andrei Iancu, Co-Chair, Council for Innovation Promotion: "…What can we do in the future that can further improve our standing around the world? There is a global free riding problem that's taking place with respect to American innovation. It comes across industries from pharmaceuticals to standards-based technologies like 5G and 6G to the movie industry and other artistic endeavors. It's across the board. What's happening because other countries do not have equally robust intellectual property regimes. What's happening is that the cost of creation and innovation is borne disproportionately by the American consumer. The Trump Administration is doing a great job focusing discussions with our trade partners to elevate the standards globally when it comes to IP. What I would love to see down the line is a robust model IP chapter that can be used from negotiation to negotiation that has minimum standards."

South Korea's Discrimination Against U.S. Firms Despite Trade Agreement Commitments

South Korea's national legislature has introduced legislation that squarely targets American technology companies, even going so far as to apply punitive restrictions on American companies, but not on their own South Korean companies or Chinese competitors with similar market dominance. These restrictions include requiring public disclosure of proprietary algorithms and restrictions on product bundling, and failure to comply would result in a complete halting of operations in Korea. In the November 2025 Strategic Trade and Investment Deal, South Korea pledged to refrain from imposing "unnecessary barriers…concerning digital services…" Despite making this commitment, the legislation has not yet been withdrawn.

Rep. Carol Miller (WV-01): "For the first time ever, countries are specifically agreeing not to discriminate against United States tech firms in bilateral trade deals that are negotiated by President Trump…It's duly important for Congress that they ensure that these agreements are enforced as other countries continue with attempts to stifle the free flow of digital trade. This is most apparent in South Korea, where the National Assembly continues to advance legislation that targets U.S. companies, including a recently passed censorship bill and recently launched a political witch hunt against two American executives. Mr. Cory, do you believe that the recent actions taken by Korea are meant to squeeze American firms out of the Korean market, and does it raise national security concerns? How should Congress address this or these issues?"

Nigel Cory, digital trade expert: "Korea should be one of the United States's closest digital trade allies, yet it has a frustrating list of issues that make life hard for U.S. firms, and it continues to add to them. There's a network bill that they've proposed which may be problematic for U.S. firms. And there's a proposed platform fairness bill as well, which also could make things worse as it relates to what the KFTC, the Korean Fair Trade Commission, does as it relates to U.S. firms. There's ongoing frustration that things in Korea don't get easier and better, despite KORUS's [United States-Korea Free Trade Agreement] long existence and the range of rules within it and the pressure born there. I think it's a matter of keeping, obviously, a close eye on it, and keeping pressure on the Administration to turn the initial commitments they got with Korea into real, tangible, enforceable rules there, and ensuring that, like the EU they don't add new barriers to it after the fact."

Why Unfair Digital Trade Barriers Matter: Maintaining U.S. Technological Leadership Is Key To Fueling Future U.S. Innovation And Jobs

The United States leads the world in digital trade, and it contributes to American research and development, high-paying jobs, and financial investment. Left unchecked, digital taxes and other trade barriers targeted at American technological businesses will impair American companies' ability to develop the next ground-breaking innovations, and ultimately, risks eroding U.S. technology leadership in the future. Only a robust U.S. response can prevent the global proliferation of such barriers and resulting harm to American workers and businesses.

Nigel Cory, digital trade expert: "My core point is simple. Digital trade is how America exports its ideas at scale. When U.S. firms can enter and compete in digital foreign markets, they expand their revenue base to reinvest in U.S. R&D, in more higher-paying U.S. jobs, and in the U.S. capital and venture systems that help commercialize research into new products. Digital trade barriers are, in essence, a tax on scale. They reduce the market that thereby funds the next wave of American innovation. With digital trade already growing faster than physical trade, and with the forthcoming impact of A.I., it's never been more important to address digital trade barriers around the world."