Ways and Means Trade Subcommittee Hearing Discusses WTO E-Customs Moratorium

India, Indonesia and South Africa have complained about the moratorium, but ultimately, it has been renewed at each World Trade Organization ministerial meeting (see 2206060068 and 2407180046).

Nigel Cory, director of digital, technology, and trade policy at Crowell Global Advisors, said during his opening statement that convincing WTO members to support "a durable extension" of the moratorium, or, ideally, a permanent ban on such duties, is an immediate priority.

"The action agenda should be to rally a coalition of like-minded economies, make the economic case that digital duties are administratively complex and distortionary, and emphasize the disproportionate burden such duties would impose on SMEs and cloud-based services," he said in the opening statement at the Jan. 13 hearing.

Rep. Don Beyer, D-Va., also asked him about the topic. He said, "I've heard that the USTR is far more proactively leading the effort to not only renew but hopefully make permanent the moratorium at the upcoming ministerial conference in Cameroon in March. That is a noted change from a few years ago ... ."

Trade Subcommittee Chairman Adrian Smith, R-Neb., blamed the Biden administration for re-evaluating digital trade policy and said it undermined U.S. leadership.

Cory also noted that Indonesia, in its reciprocal trade agreement, said it would support the moratorium at the WTO. "That alone could change the dynamics," he said, but added: "They need to lock them into that."

A number of members, including committee Chairman Jason Smith, R-Mo., asked the panel how Congress can support the fight against digital services taxes, or DSTs, and streaming localization requirements beyond supporting Section 301 investigations and punitive actions. The witnesses just returned to the need for Section 301, but said that congressional letters and publicity on irritants can also keep the pressure on.

Andrei Iancu, co-chair of the Council for Innovation Promotion, said in his opening statement that Congress should pass the Shop Safe Act to protect consumers from "the continued influx of counterfeit goods into the United States," which he said causes serious safety risks. He said that while border interceptions are good, Stop Safe would encourage "online marketplaces to take greater responsibility for preventing the sale of counterfeit products." He also said "a comprehensive strategy must also focus on countries where counterfeit products are manufactured." He said a study estimated that global trade in counterfeits was $467 billion in 2021, with about 75% of the value attributed to products made in China and Hong Kong, and about 15% products made in Turkey.

Although the hearing was mostly about non-tariff barriers and discrimination against service firms, a number of Democrats criticized President Donald Trump's goods tariffs.

Trade Subcommittee ranking member Linda Sanchez, D-Calif., questioned the decision to hold a hearing on this topic. She said, "Is Congress’ top focus really digital trade right now?

"Americans are facing higher prices on everything from groceries to housing due to President Trump’s tariffs. And American manufacturing jobs are declining under his watch. Since Trump took office, we have lost a staggering 68,000 American manufacturing jobs."

Beyer noted that the tariff rate hasn't been this high since the 1930s.

"And this is supposedly in an effort to decrease outsourcing and offshoring and increase employment and wages here at home. We've had manufacturing jobs fall for eight straight months," he said.

Rep. Jodey Arrington, R-Texas, defended the president's tariff policy, saying fair trade is a necessary precondition for free trade.

He said people "want to disagree about the style and strategy of the president who's actually been effective in achieving the outcomes of a level playing field and access to our producers and manufacturers."

He said, "We could all armchair quarterback [over] how we do it. The fact is no one's done it. Not like Republicans or Democrats in recent years. Quite frankly, it's mostly because they don't have the political will to resist the various special interest pressures that are applied to every politician in this town as it relates to what is necessary to negotiate from strength to get us to this place."

He said critics of tariffs said it would cause higher inflation, and said the latest numbers showed that didn't happen. This week's inflation report said that prices were 2.7% higher in December 2025 compared with November 2024; the year-on-year inflation rate in November was also 2.7%. That is higher than the Federal Reserve's target, but down from September, when it was 3%, and far below the height in June 2022, when it was 9%.

Rep. Brendan Doyle, D-Pa., rebutted Arrington when he had his turn to ask questions, quoting Federal Reserve Chairman Jerome Powell's statement that "It's really tariffs that are causing most of the inflation overshoot."

Doyle called the tariff a "national sales tax on imported goods," but said the impact goes beyond inflation to dampening hiring.

"I know the president and the administration keep claiming that tariffs are rebuilding American manufacturing, but the data tells a different story. According to the December 2025 jobs report, the United States lost 68,000 manufacturing jobs last year."

Rep. Jimmy Panetta, D-Calif., said he supports the hearing's topic. "That said, though, I do admit that I'm struck by how this administration's actions are undermining American global leadership across many sectors. Many of you have emphasized in your testimonies the importance of the United States rallying international consensus around emerging technology standards, intellectual property protections, and digital trade rules. However, I struggle to see how we can achieve that goal when our partners increasingly view the United States as unreliable and borderline capricious, especially in our trade policies."