US trade dominance will soon begin to crack

In 2026, Leaders of America’s (former) trading partners will have to deal with the political consequences of imposing reciprocal tariffs. A tariff is a tax paid by consumers, and if there’s one thing the past four years have taught us, it’s that the public will never forgive a politician who presides over a period of high prices, no matter the reason.

Fortunately for the political fortunes of world leaders, there is a better way to respond to tariffs. Reciprocal tariffs are a 19th-century tactic, and we live in a 21st-century world — a world where the most profitable business lines of America’s most profitable companies are all vulnerable to a simple legal change that would make things cheaper for billions of people, all over the world, including the United States, to the detriment of companies whose CEOs stood with Trump on the inaugural stage.

In 2026, countries that want to win the trade war have a unique historical possibility: They may be able to repeal “anti-fraud” laws, which make it illegal – a felony in many cases – to modify devices and services without getting permission from their manufacturers. Over the past two decades, the US Trade Representative’s Office—responsible for developing and coordinating US international trade, goods, and direct investment policy—has pressured most of the world’s countries to adopt these laws, hindering foreign startups that might compete with Apple (by providing a jailbreak kit that installs a third-party app store), Google (by blocking tracking on Android devices), Amazon (by converting Kindle and Audible files to formats that run on competing apps), or John Deere (by disabling systems that prevent third-party repairs III), or the Big Three automakers (by deciphering the encrypted 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. The governments of the world have agreed to protect this racket in exchange for access to American markets without customs duties. Now that the United States is backing out of its end of the bargain, these laws serve no useful purpose.

US tech giants (and the giant US companies that use the technology) have used digital locks to amass a massive trove of illicit wealth. In 2026, the first country bold enough to raid this treasure will be able to turn hundreds of billions in American rents into hundreds of millions in domestic profits that launch its domestic tech sector into a stable orbit — and the remaining hundreds of billions will be reaped by all of us, everyone in the world (including Americans who buy gray market jailbreaks from abroad), as consumer surplus.

In 2026, many countries will respond to tariffs as they did in the 19th century. But few countries will have the vision, audacity, and political savvy to oust Donald Trump outright. The country that gets there first will enjoy the same relationship, for example, with third-party app stores for game consoles that Finland enjoyed for mobile phones during the Nokia decade.

There are many countries that have the technical capacity to achieve this. Canada and Mexico clearly have the upper hand, since Trump tore up bilateral relations USMCA Agreement He twisted their arm in 2020, hurling racist rhetoric at Mexico even as he threatened to annex Canada. In talking about annexation goals with large communities of technical experts, the Danes could lead the EU out of the wilderness the bloc negotiated its way into when it was enacted. Article 6 of the Copyright Directive 2001. Then there is the Global South: African tech powerhouses like Nigeria, South American giants like Brazil, and small developed Central American nations that have seen Trump back down. Central American Free Trade Agreement (CAFTA), such as Costa Rica.