Trump’s digital regulation warning was aimed at this country (and not Europe)

A threat from President Donald Trump to impose “substantial” tariffs on countries that regulate U.S. tech companies is riling up Europe. But the continent’s digital regulations were not Trump’s primary target.

Trump’s Aug. 25 post threatening to penalize “all countries with Digital Taxes, Legislation, Rules, or Regulations,” did not specify any territory by name. However, four people familiar with the White House’s conversations on digital trade policy say it was largely a response to several pieces of tech-focused legislation under consideration in South Korea’s parliament. The people were granted anonymity to discuss ongoing negotiations.

Trump’s threat is poised to complicate the talks between Seoul and Washington to nail down the details of the preliminary trade agreement their governments reached in July. At the same time, it has alarmed leaders in the European Union and United Kingdom, who worry Trump’s new demand could upend tentative trade agreements they have reached.

“Trump’s post was a warning shot to South Korea and other countries weighing new rules on digital trade not to follow the European Union’s approach,” according to a person who spoke with Trump the day of his Truth Social post.

Trump’s missive came shortly after he met with new South Korean President Lee Jae Myung at the White House, and after Lee’s government refused to sign onto a joint statement on the preliminary trade agreement that included a pledge to block legislation to regulate large tech companies operating in the country.

While the South Korean government did not officially respond to the post, it drew an immediate response from EU officials, who declared it their “sovereign right” to oversee economic activities on their soil. Several EU leaders vigorously refuted the Trump administration’s claim that European restrictions unfairly target American tech companies. And EU Commission spokesperson Thomas Regnier said its regulation “does not look at the color of a company, at the jurisdiction of a company, nor the owner of a company.”

But while Europe’s digital regulations are despised by U.S. tech giants, the White House is more focused on countries like South Korea, India, Turkey and Brazil, which are currently considering draft rules loosely modeled on Europe’s laws.

Senior White House officials see South Korea’s response as a litmus test on whether they will be able to pressure other trading partners to abort pushes for new digital restrictions, three of the people said.

“Part of it was the frustration that Europe hasn’t budged,” said another person close to the White House on Trump’s post. “But there was more a recognition … that South Korea was probably among three or four other jurisdictions potentially looking to be first followers of the EU — to mirror or mimic that approach. So he was like, ‘Okay, South Korea is here, their new president has said this is a priority, and we’ve got to nip this in the bud.’”

A White House official told POLITICO that Trump has “consistently opposed” digital regulations from countries that target American tech companies. Those discussions are “part of almost every trade negotiation we’re having,” the official added.

South Korean lawmakers in recent years have floated a series of proposals that could classify major U.S. tech companies as monopolies or gate-keepers, and open them up to steep fines, including the Platform Competition Promotion Act proposed in 2023. Those and similar proposals are drawing growing criticism from Trump allies in the U.S., including lawmakers like Sen. Bill Hagerty (R-Tenn.), who co-led a letter sent in late July warning that Seoul’s proposed rules could give Chinese tech companies an edge there.

Leading MAGA voices have also taken note: conservative activist and podcaster Charlie Kirk shared a post on X on Aug. 24 complaining that South Korea’s government “still targets U.S. industry with regulations while giving Chinese companies a free pass.”

“Only Trump can fix this, no more free passes for China while we get punished,” Kirk wrote.

U.S. Trade Representative Jamieson Greer has brought up the legislation in trade talks with his South Korean counterparts, but digital trade wasn’t addressed in the limited trade agreement the two countries announced late July. The announcement — which Trump posted on social media — was scant on details, saying only that South Korea had agreed to a 15 percent tariff on its exports in exchange for a pledge of more than $350 billion in investment and an additional $100 billion in energy purchases.

Ahead of the president’s meeting with Lee, however, senior Trump administration officials pressed the South Korean government to sign a joint statement on the deal that included language pledging to abandon proposals for digital trade restrictions, according to three people familiar with the discussions. South Korea rejected that draft language.

Seoul insists it will press ahead with some form of digital regulation, though it has adjusted its approach to address expectations from the Trump administration. As a result of trade talks with Washington, South Korea’s liberal party will give up on at least one proposal, known as the Online Platform Regulation Act, according to a senior official quoted in local reports, and will instead consider pared back digital rules.

Some South Korean officials say they would be willing to ease digital proposals that the Trump administration claims discriminate against American companies, and the Trump administration believes they are making progress toward convincing Lee’s administration to reject any digital legislation that hits American companies.

“A lot is on the table and a lot of those demands are far tougher for South Korea than the digital issues,” said a person close to the White House.

While South Korea’s legislation has long been on Big Tech’s radar, it only recently came to Trump’s attention, following days of briefings that highlighted Lee’s pledges to tighten digital regulations during the country’s presidential campaign earlier this year. High-profile Trump supporters have also recently taken note of the tech debate taking place in South Korea.

Kirk’s X post was also shared with the president during a briefing ahead of the summit, as was an op-ed from former Trump national security adviser Robert O’Brien warning South Korea’s digital legislation, if passed, would be a “gift” to the Chinese government.

Trump echoed that language in his Truth Social post, suggesting that other countries’ digital regulations “outrageously, give a complete pass to China’s largest Tech Companies.”

“If Trump wants to go after Amazon, Google, or other U.S. tech firms here at home, that’s his prerogative, but other countries shouldn’t be messing with American tech firms. That’s clearly how folks like Charlie Kirk feel, and I think that’s how the president feels too,” said a former Republican official, who frequently meets with the president and senior White House officials.

White House aides also presented Trump with letters from Republican lawmakers asking the administration to address the digital dispute as part of trade negotiations with South Korea, the people said.

Ahead of Lee’s visit, House Ways and Means Republicans Adrian Smith (Neb.) and Carol Miller (W.Va.) released public statements calling on the administration to address the country’s digital proposals, and led a letter from more than 40 House Republicans warning that South Korea’s measures would disproportionately target U.S. tech firms.

Said Miller: “President Trump is a known dealmaker, and I am confident that he will help secure fair market access for our digital companies operating abroad.”