US Trade Dominance Will Soon Begin to Crack
In 2026, the leaders of America's (former) trading partners will have to deal with the political consequences of tit-for-tat tariffs. A tariff is a tax paid by consumers, and if there is one thing the past four years have taught us, it is that the public will not forgive a politician who presides over a period of rising prices, whatever 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 tactic of the 19th century, and we live in a world of the 21st century – a world where the most profitable companies of the most profitable American companies are all vulnerable to a simple legal change that will make things cheaper for billions of people, all over the world, including in the USA, at the expense of the companies that are set up with the CEOs of Trump.
In 2026, countries that want to win the trade war have a unique historic opportunity: they can lift their “anti-circumvention” laws, which make it illegal – a crime, in many cases – to modify devices and services without the permission of their manufacturers. Over the past two decades, the office of the US Trade Representative – which is responsible for developing and coordinating US international trade, commodity and direct investment policies – has pressured most of the world to adopt these laws, foreign startups that could compete with Apple (by providing a jailbreaking kit that installs a third-party app store), or Google (by converting Android files to Kindle), or Google (by converting Kindle files to Audible). formats that work on rival apps), or John Deere (by disabling the systems that block third-party repairs), or the Big Three car manufacturers (by decoding the encrypted error messages that mechanics need to service our cars). The rents these digital locks help American businesses extract run into the hundreds of billions of dollars each year. The world's governments have agreed to protect this racket in exchange for tariff-free access to American markets. Now that the US has reneged on its side of the bargain, these laws serve no useful purpose.
American tech giants (and giant American companies that use tech) have used digital locks to amass a vast trove of ill-gotten wealth. In 2026, the first country bold enough to raid this treasure gets to transform hundreds of billions of 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 from a jailbreak on the gray market), or a consumer jailbreaking.
In 2026, many countries will respond to tariffs as they were still in the 19th century. But few countries will have the vision, the boldness and the political savvy to kick Donald Trump straight in the dongle. The country that gets there first will enjoy the same relationship with, say, third-party app stores for games consoles that Finland enjoyed in relation to mobile phones during the Nokia decade.
There are many countries with the technical know-how to pull this off. Of course, Canada and Mexico have pride of place, since Trump has torn the USMCA agreement he arm-wringed them in 2020, hurling racist rhetoric at Mexico even as he threatened to annex Canada. Talking about annexation goals with large communities of technical experts, the Danes can lead the EU out of the wasteland the bloc negotiated its way into when they set up Article 6 of the Copyright Directive in 2001. Then there's the global south: African tech powerhouses like Nigeria, South American giants like Brazil, and the small, developed Central American states that Trump has watched destroy on the Central American Free Trade Agreement (CAFTA), like Costa Rica.
