US Trade Dominance Will Soon Begin to Crack
In 2026, the The leaders of the United States’ (former) trading partners will have to face the political consequences of the tariffs. A tariff is a tax paid by consumers, and if there’s one thing the last four years have taught us, it’s that the public will not forgive a politician who presides over a period of rising prices, regardless of the cause.
Fortunately for the political fortunes of world leaders, there is a better way to respond to tariffs. Tit-for-tat tariffs are a 19th-century tactic, and we live in a 21st-century world — a world where the most profitable lines of business of America’s most profitable companies are all vulnerable to a simple legal change that will make things cheaper for billions of people around the world, including in the United States, at the expense of the companies whose CEOs posed with Trump on the inaugural podium.
In 2026, countries that want to win the trade war have a unique, historic opportunity: They could repeal their “anti-circumvention” laws, which make it illegal – a crime in many cases – to modify devices and services without permission from their manufacturers. Over the past two decades, the Office of the U.S. Trade Representative — charged with developing and coordinating U.S. policy on international trade, commodities and direct investment — has pressured most countries around the world to adopt these laws, crippling foreign startups that might compete with Apple (by providing a jailbreak kit that installs a third-party app store), or Google (by blocking tracking on Android devices), or Amazon (by converting Kindle and Audible files to formats that work on competing applications), or John Deere (by disabling systems that block third-party repairs), or the Big Three automakers (by decoding the cryptic error messages that mechanics need to service our cars). The rents that these digital locks help American companies extract amount to hundreds of billions of dollars each year. Governments around the world have agreed to protect this racket in exchange for tariff-free access to U.S. markets. Now that the United States has given up its share of the bargain, these laws no longer serve any purpose.
American tech giants (and major American companies that use technology) have used digital locks to amass a vast trove of ill-gotten wealth. By 2026, the first country bold enough to plunder this treasure trove will turn hundreds of billions in U.S. rents into hundreds of millions in domestic profits that will propel its domestic tech sector into a stable orbit — and the remaining hundreds of billions will be reaped by all of us, everywhere (including Americans who buy jailbreak tools on the gray market abroad), as consumer surplus.
In 2026, many countries will respond to tariffs as they still did in the 19th century. But a few countries will have the vision, the audacity and the political intelligence necessary to kick Donald Trump. The country that gets there first will benefit from the same relationships, for example with third-party app stores for games consoles, that Finland enjoyed with mobile phones during the Nokia decade.
Many countries have the technical skills to achieve this. Clearly, Canada and Mexico are in the spotlight, ever since Trump tore up the USMCA deal he forced them into in 2020 and unleashed racist rhetoric against Mexico even as he threatened to annex Canada. By talking about annexation goals with large communities of technical experts, the Danes could lead the EU out of the wilderness the bloc navigated its way into when they enacted Article 6 of the Copyright Directive in 2001. Then there is the South: African tech powers like Nigeria, South American giants like Brazil, and the small developed states of Central America that saw Trump roll back the Accord Central American Free Trade (CAFTA), such as Costa Rica.
