The Big Story: Startups need trade certainty to compete globally
As all three branches of the federal government dig into tariffs and trade deals, the global trade landscape remains uncertain for startups. The House voted this week to end the emergency underlying some of President Trump’s tariffs. Across the Capitol, a key Senate committee underscored the need for trade certainty as senators discussed an important trade agreement. And the Supreme Court has yet to rule on the legality of some of Trump’s tariffs. The mixed messaging on trade—and the ongoing political division over tariffs—adds yet another layer of uncertainty to an already volatile environment for U.S. companies trying to plan, hire, and grow at home and abroad.
In a narrow vote this week, the House passed a resolution to end the emergency Trump declared last year in order to impose tariffs on Canada. The vote—which had been delayed by House Republican leadership—is an attempt to reassert congressional authority over Trump’s sweeping and indiscriminate use of tariffs. Six Republicans joined all but one Democrat to pass the resolution, reflecting a growing bipartisan willingness to curtail the Trump’s administration’s broad use of tariffs. The congressional action comes as the Supreme Court prepares to rule on the legality of Trump’s use of emergency authority to impose tariffs. During oral arguments last year, justices appeared skeptical that the sweeping global tariffs were justified under a 1977 national emergency statute. Broad-based tariffs not tied to specific, achievable goals tend to harm startups directly through increased costs, and indirectly by undermining cooperation with partners, which can create new barriers for startups trying to operate and compete abroad.
Also causing uncertainty for startups looking to grow globally is the Trump administration’s apparent appetite to renegotiate the U.S.-Mexico-Canada Agreement (USMCA). It is up for joint review among the parties this year, and the administration has said that “a rubberstamp of the Agreement is not in the national interest.” The USMCA includes digital trade provisions—including cross-border data flows and prohibiting data localization mandates—that help U.S. startups reach customers across Canada and Mexico, views we shared with the administration in a filing last fall. Those important digital provisions received bipartisan support from key lawmakers at a hearing on the agreement this week, but the status of the broader agreement is contributing to uncertainty.
Startups, in particular, depend on predictable trade rules and consistent enforcement to plan, invest, and expand internationally. Rather than relying on sweeping emergency authorities or fluctuating tariff threats, policymakers should prioritize strong digital provisions that reduce barriers and predictable trade environments that give startups the certainty they need.
Policy Roundup:
Patent valuation fee proposal not moving forward. U.S. Secretary of Commerce Howard Lutnick confirmed during an Appropriations subcommittee hearing on Tuesday that he does not plan to implement the Trump administration’s proposed patent fees and valuation framework. The proposal would have charged patent holders a percentage of their patents’ value in addition to existing application and maintenance fees, creating additional financial burdens and uncertainties for innovators.
Controversial age verification legislation comes to the House. Policymakers in the House introduced a companion bill to the Kids Off Social Media Act—as the Senate Commerce Committee advanced the bill last year—in efforts to restrict young users’ access to social media platforms. Proposals like these that effectively require age verification would strain startups’ limited budgets, increase cybersecurity risks, and disrupt user experience.
Commerce Secretary commits remaining BEAD funding to connectivity. At the Senate Appropriations subcommittee hearing this week, U.S. Secretary of Commerce Howard Lutnick indicated that funds from the Broadband Equity, Access, and Deployment (BEAD) program that were not deployed through program plans would still be used according to the originally intended connectivity goals. Continuing to work towards closing the digital divide—and maintaining BEAD’s original commitment to affordable broadband policies—ensures an equal playing field for startup innovators.
Litigation funding transparency gains momentum. The Senate introduced the Litigation Funding Transparency Act on Tuesday, a bill that would require the disclosure of third-party litigation funders at the outset of a lawsuit to expose the hidden interests behind cases. This transparency would help prevent patent trolls from pursuing abusive litigation against startup founders.
Startup Roundup:
#StartupsEverywhere: Chicago, Illinois. Co-founded by Aniirudh "Ani" Ramesh and Joshua Waite, asters specializes in next-generation AI-based simulation products. We sat down with Ani and Joshua to discuss what led them to found asters, the work they do, the impacts of the closing federally funded projects and programs, hurdles related to federal and state funding, and what the future of asters will entail.
