US digital trade policy faces a period of uncertainty

Significance

Digital trade, from e-commerce to cloud services and streaming movies, is taking a growing place in US external trade. Yet Washington's digital trade policy has seen a hiatus since the Biden administration abruptly reversed course last October on longstanding US support for the open cross-border data flows that underpin digital trade.

Impacts

• Washington and Beijing will extend their battle for influence in the global trading system to engage with digital trade.
• 'Know-your-customer' due diligence imposed on financial institutions will expand to digital services trade to mitigate cybersecurity risks.
• Connected vehicles will become a hybrid physical-digital trade issue, with heavy national security and anti-China sentiment overlays.