Save StorySave this storySave StorySave this story<\/p>\n
In 2026, the leaders of America\u2019s (former) trading partners are going to have to grapple with the political consequences of tit-for-tat tariffs. A tariff is a tax paid by consumers, and if there\u2019s one thing the past four years have taught us, it\u2019s that the public will not forgive a politician who presides over a period of rising prices, no matter what the cause.<\/p>\n
Luckily for the political fortunes of the world\u2019s 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\u2014a world where the most profitable lines of business of the most profitable US 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 US, at the expense of the companies whose CEOs posed with Trump on the inaugural dais.<\/p>\n
In 2026, countries that want to win the trade war have a unique historical possibility: They could repeal their \u201canticircumvention\u201d laws, which make it illegal\u2014a felony, in many cases\u2014to modify devices and services without permission from their manufacturers. Over the past two decades, the office of the US Trade Representative\u2013which is responsible for developing and coordinating US international trade, commodity, and direct investment policy\u2014has pressured most of the world into adopting these laws, hamstringing foreign startups that might compete with Apple (by providing a jailbreaking 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 rival apps), or John Deere (by disabling the systems that block third-party repairs), or the Big Three automakers (by decoding the encrypted error messages mechanics need to service our cars). The rents that these digital locks help American companies extract run to hundreds of billions of dollars every single year. The world\u2019s governments 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.<\/p>\n
US tech giants (and giant US companies that use tech) have used digital locks to amass a vast hoard of ill-gotten wealth. In 2026, the first country bold enough to raid that hoard gets to transform hundreds of billions in US rents into hundreds of millions in domestic profits that launch its domestic tech sector into a stable orbit\u2014and the remaining hundreds of billions will be reaped by all of us, everyone in the world (including Americans who buy gray-market jailbreaking tools from abroad), as a consumer surplus.<\/p>\n
In 2026, many countries will respond to tariffs like they were still in the 19th century. But a few countries will have the vision, the boldness, and the political smarts to kick Donald Trump right in the dongle. The country that gets there first will enjoy the same relationship to, say, third-party app stores for games consoles, that Finland enjoyed in relation to mobile phones during the Nokia decade.<\/p>\n
There are many countries with the technical nous to pull this off. Obviously, Canada and Mexico have pride of place, since Trump has torn up the USMCA agreement he arm-twisted them into in 2020, and heaped racist rhetoric on Mexico even as he threatened to annex Canada. Speaking of annexation targets with sizable communities of technical experts, the Danes could lead the EU out of the wilderness the bloc bargained its way into when they enacted 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 who've seen Trump renege on the Central American Free Trade Agreement (CAFTA), like Costa Rica.<\/p>\n
Retaliatory tariffs make consumer goods in your own country more expensive, and to the extent that they punish Americans, they do so indiscriminately, inflicting far more pain on soybean farmers than they do on the CEOs of the tech companies that back Trump.<\/p>\n
Repealing anticircumvention law is a targeted strike on America\u2019s most profitable companies, and it will have an especially severe impact on Tesla, whose hyperinflated price-to-earnings ratio reflects investors\u2019 pleasure at the Tesla business model, which involves charging drivers every month for subscription features and software upgrades that expire when a car changes hands. Musk owes his power to the digital locks that keep this business model intact. If it were legal for mechanics all over the world to jailbreak Teslas and unlock all those features for one price, Tesla\u2019s share price would collapse\u2014taking with it the overvalued shares Musk uses to collateralize the loans he took out to buy Twitter and the US presidency.<\/p>\n
In 2026, world leaders have a choice\u2014to make things cheaper and better for all of us, or to fight Donald Trump with weapons that were developed in the Age of Sail.<\/p>\n","protected":false},"excerpt":{"rendered":"
Save StorySave this storySave StorySave this story In 2026, the leaders of America\u2019s (former) trading partners are going to have to grapple with the political consequences of tit-for-tat tariffs. A tariff is a tax paid by consumers, and if there\u2019s one thing the past four years have taught us, it\u2019s that the public will not […]<\/p>\n","protected":false},"author":1,"featured_media":41705,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":{"0":"post-41704","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/41704","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=41704"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/41704\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/41705"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=41704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=41704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=41704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}