The Tarrifying Trumponomics

** Ashish Chauhan and Ananya Rai 

It won’t be a hyperbole if one labels Donald Trump’s recent attitude with respect to trade with India as belligerent. In the grand scheme of ‘America First Trade Policy’, Trump has been lashing out against trade partners, including India, with an underlying assumption that the United States has suffered significantly due to an inequitable trade structure. Politically, Trump justifies his claims by basing them on concerns about creating more jobs and bolstering economic growth in the US but it increasingly reveals a deeper entanglement where business interests are portrayed as national interests and crony-capitalism in on blatant display. The signs have been hard to miss – from big corporations openly courting Trump during his 2025 presidential campaign to Trump’s reciprocation by providing  business moguls like Elon Musk with overt political positions. A case in point is Trump’s denunciation of the European Union’s Digital Market Act [“DMA”] as a form of ‘unjust taxation’ – this combative stance against antitrust legislation, especially when it may affect American Big Tech, offers a preview of how similar efforts may be received elsewhere. 

It is in this context that the authors delve into the treatment meted out against the DMA, further examining how Trump’s worldview may shape U.S. reactions to India’s Draft Digital Competition Bill [“DCB”] towards regulating digital markets.

The American problem with the DMA

Undoubtedly, the dynamics of market competition in the digital economy are worlds apart from those in the brick-and-mortar economy. Therefore, complementing the existing competition regulations, the EU brought in DMA for the digital market, with an ex-ante mechanism to prevent anti-competitive practices before they occur. The legislation seeks to regulate a special category of pre-identified platforms that enjoy an entrenched and durable position in the market. This category is termed as ‘gatekeepers’ in the legislation.

The legislation lays down specific thresholds, like, €7.5 billion annual EU turnover or €75 billion market capitalisation, along with at least 45 million monthly EU users, and at least 10,000 yearly EU business users in each of the last three financial years, to designate an undertaking as a gatekeeper. These gatekeepers must adhere to strict obligations to ensure fair competition and protect user data. These include obtaining consent for data processing in targeted advertising, prohibiting data cross-use, ensuring nondiscrimination against business users, allowing third-party access to content, and enabling user complaints to authorities.  Noncompliance risks a fine up to 10% of annual global turnover (20% for repeat violations), behavioural or structural remedies like divestitures, or acquisition bans. Till now, the DMA has designated seven companies as gatekeepers, which include Alphabet, Amazon, Apple, Booking.com, ByteDance, Meta, and Microsoft, subjecting them to elaborate ex-ante rules to boost competition with smaller rivals and ensure choice for consumers in the market.

The problem, however, stems from the assessment of this category by the Trump administration and the American Big-Tech Corporations. For them, since five out of seven gatekeepers are American firms, the legislation dons the cloak of European protectionism and, as a result, treats American corporations unfairly. It is viewed as an effort to establish European dominance and promote local enterprises at the cost of American Big Tech. The assessment ignores the nitty-gritty of digital competition and renders the justification provided by the legislation invalid.

On this backdrop, it is also important to recognise that American big tech companies, such as Alphabet, Amazon, Apple, Meta, and Microsoft, dominate global markets due to their first-mover advantage and robust institutional support, underpinned by favourable structural factors. Their early entries, like Google’s 1998 search engine, Amazon’s 1994 e-commerce platform, and Apple’s 2007 iPhone established brand loyalty and network effects, creating high barriers to entry for newer competitors. Network effects amplified platform value with user growth, thereby cementing market dominance. Moreover, institutionally, the US provides a conducive environment through lighter regulatory frameworks, while elite universities (e.g., Stanford), and Silicon Valley’s venture capital ecosystem supply talent and funding. The US’ large, affluent market facilitates rapid scaling, and its immigration policies also attract global expertise, fostering entrepreneurship. These factors have led American Big-Tech players to an entrenched position in the digital economy, where they can leverage their advantage to further exclude newer players. It is this dominance that necessitates the introduction of legislation like the DMA. Ignoring these background factors and solely relying on the nationality of companies presents us with a partial truth, which is a breeding ground for demagoguery.

Additionally, as European/Asian companies scale up and reach the threshold of being designated a gatekeeper, they are provided with similar treatment. The inclusion of ‘Booking.com’ and ‘ByteDance’ clearly reflects that the legislation is not intended to be discriminatory (unnecessarily), thereby junking claims of being protectionist in approach.

DCB and the borrowed problem

The dominance of Big Tech is not merely a Western regulatory concern. This dominance is mirrored in India’s markets too. Today, Google controls over 95% of the search engine market and Android powers nearly 90% of Indian smartphones. Likewise, Meta’s platforms, WhatsApp, Facebook, and Instagram, are among the most widely used social and messaging apps, giving them an entrenched position in the sphere of Indian digital communications. In the e-commerce sphere, Walmart’s subsidiary Flipkart enjoys a dominant position, raising concerns about self-preferencing and deep discounting practices that harm small sellers. These patterns echo global concerns, but with uniquely Indian implications, where market consolidation can stifle local innovation, undermine the Digital India vision, and harm consumers in price-sensitive markets. 

Recognising the entrenched position of Big Tech in India and the limitations of traditional antitrust tools in addressing structural imbalances in digital markets, Indian competition regulators have increasingly looked westward for solutions. The Draft Digital Competition Bill is no exception. Drawing from mature jurisdictions such as the EU, particularly its DMA, the Bill aims to preemptively curb anti-competitive conduct in core digital services and ensure fair market access.Indian competition regulators have regularly looked westward for solutions to the potential antitrust problems in India. The Draft Digital Competition Bill is no exception. By virtue of being from a mature jurisdiction, the EU and its DMA have played a foundational role in the draft bill proposed by the Committee on Digital Competition Law with respect to digital markets in its current form and “to examine the need for an ex-ante regulation.”

The category of Systemically Significant Digital Enterprises [“SSDE”] in the DCB is heavily inspired by the category of Gatekeepers. The framework targets firms controlling core digital services, such as search engines, social media, and operating systems, which act as critical intermediaries. The gatekeeper criteria are further replicated with minor changes in the DCB’s SSDE criteria under Section 3, through the combined quantitative thresholds and qualitative assessments of market influence and intermediation roles. Additionally, DCB also imposes ex-ante obligations, including prohibitions on self-preferencing, data cross-use restrictions, and data portability mandates and fines up to 10% of global turnover for non-compliance in instances of failure.

However, it would not come as a surprise if this regulation also receives a similar treatment from the Trump administration as the DMA. While the DMA isn’t  technically a tariff, it is being seen as such by the White House, and he has threatened to proceed ahead with reciprocal tariffs in case EU regulators do not alter their regulatory paradigm. This attitude of Trump should be observed along with his continued attacks on the Indian tariff regime, which dates back to his first tenure, where he called India a ‘tax-king’. In his second tenure, where the pitch has been even higher, Trump has already begun arm-twisting the Indian government to reduce the tariff structure. Given this background, it is entirely plausible that the DCB, if enacted, would also be framed by the Trump administration as a disguised trade barrier, prompting threats of reciprocal tariff imposition, even though it squarely falls within India’s sovereign regulatory domain.

Furthermore, quantitatively, India’s DCB has a lower threshold for declaring an enterprise as an SSDE when compared to DMA. This means that DCB’s catchment area is larger which increases the likelihood of a large number of Big Tech firms, many of them American, being subjected to ex-ante obligations in India, even if they are not yet designated as gatekeepers in the EU. As a result, the Trump administration could view the Indian regime as even more aggressive than the EU’s, potentially provoking stronger diplomatic pressure or retaliatory economic tactics. In this sense, India may find itself facing external pushback of a magnitude equal to, or perhaps, even greater than that faced by the EU.

The Road Ahead

Justice Holmes, a towering figure in the realist school of jurisprudence, famously observed that the life of law has not been logic, but experience. While a formalist view may focus on the technical merits of the ex-ante framework, a realist lens urges consideration of practical realities and social priorities. The Trump administration’s likely opposition, expressed through retaliatory trade measures, poses one such reality. However, equally compelling are India’s own public interest considerations, such as the need to preserve competitive markets, prevent digital monopolies, and protect consumer choice in a rapidly digitising economy. Given that India’s internet user-base is among the largest on the global stage, and with homegrown innovation still in its infancy, the DCB could become a vital tool to prevent abuse from gatekeepers and foster fair access. Hence, experientially, the trade-off is between a higher tariff regime and a fairer digital market. With the US, India’s top trading partner, watching closely, the real test lies not in the drafting of this Bill, but in whether India will prioritise its long-term digital sovereignty over short-term geopolitical discomfort. Interesting times for sovereignty!

**Ashish Chauhan is a fourth-year B.A., LL.B. (Hons.) student at Dr. Ram Manohar Lohiya National Law University, Lucknow. His interests include Competition Law and Sociology of Law

**Ananya Rai is a third-year B.A., LL.B. (Hons.) student at National Law University, Jodhpur, with a keen interest in constitutional law, public policy, and feminism, and community development.

**Disclaimer: The views expressed in this blog do not necessarily align with the views of the Vidhi Centre for Legal Policy.