Startup News Digest 07/24/26
The Big Story: Administration pieces trade authorities together to keep up tariffs
Startups that rely on global suppliers and international users are gearing up for new tariffs that will make it harder to grow in a global economy. This week, the Trump administration advanced several tariff actions aimed at effectively reconstructing their sweeping tariff regime struck down by the Supreme Court earlier this year—including using Section 301 of the Trade Act to impose tariffs of 10 or 12.5 percent on imports from 60 economies, just before the temporary 10 percent global tariffs imposed under Section 122 expired Friday. Also this week, new tariffs targeting Brazil took effect, and the administration announced 50 percent tariffs on certain Canadian goods using a never-before-used part of trade law dating to the Great Depression. And still more potential tariffs are hanging out there, most notably a separate 301 investigation into “excess capacity” in 16 economies, including important trading partners like China and the European Union. For startups, the administration’s dogged pursuit of tariffs on imports from major trading partners continues to raise costs of components manufactured abroad, increase uncertainty, and invite retaliation, which could come in the form of digital trade barriers.
The latest actions reflect a broader effort to reconstruct the administration’s tariff agenda after the Supreme Court invalidated the global tariffs imposed under the International Emergency Economic Powers Act earlier this year. The administration had immediately replaced those tariffs with a temporary 10 percent global tariff imposed under Section 122, which expired early Friday. On Thursday, the administration took final action in a Section 301 investigation into forced labor policies across top U.S. trading partners, resulting in tariffs of 10 or 12.5 percent on goods from 60 economies, effectively replacing the expiring duties with new duties supposedly justified by an investigation.
In testimony before the Senate Finance Committee this week, U.S. Trade Representative Jamieson Greer continued to defend the administration’s broader trade strategy noting that specific tariff authorities have changed, but its trade strategy has not, underscoring that policymakers and market participants should expect continued tariff actions even after the Supreme Court’s ruling. Startup founders have described the current trade environment as “chaotic,” and like “spinning a wheel” when it comes to navigating costs, delays, and other tariff-induced supply-chain challenges. Stable and predictable trade policy helps startups access global supply chains, reach foreign markets, and compete from the U.S. without having to navigate constant tariff changes or retaliatory threats.
Policy Roundup:
Lawmakers scrutinize SBA program delays, cuts. At a hearing on Wednesday, House Small Business Committee members questioned Small Business Administration's (SBA) Office of Entrepreneurial Development Associate Administrator Paul Fitzpatrick about the agency’s overhaul of entrepreneurial support programs, including pauses and proposed changes affecting grant, mentorship, and trade assistance programs. Democrats on the committee spent most of the hearing being critical of the Trump administration's proposed budget, which would see significant cuts to SBA programs, specifically mentorship programs and the State Trade Expansion Program, which helps small businesses looking to reach global markets. In response, Fitzpatrick defended the President's budget and suggested alternative funding sources to supplement federal funding, including state funding and public-private partnerships. Lawmakers also repeatedly pressed Fitzpatrick for information on the agency's delays in dispersing committed grant funding, while Fitzpatrick and some Republicans on the committee defended the delays as the result of a broader agency reorganization to increase accountability and interoperability.
Congress advances broadband initiatives. This week, Congress moved forward with broadband initiatives aimed at strengthening connectivity and infrastructure. In the Senate, the Senate Commerce, Science, and Transportation Committee advanced the Accelerating Broadband Permits Act and the full chamber passed the Modernization, Accountability, and Planning for Broadband Funding Act. In the House, the Energy and Commerce subcommittee on communications and technology approved the Proper Leadership to Align Networks for Broadband Act, and the Senate. Together, these measures could benefit startups by streamlining federal broadband permitting, improving funding oversight, and increasing the accuracy of broadband maps, though efforts to reduce or consolidate broadband programs could limit resources that help startups and their customers maintain reliable, affordable high-speed connectivity.
Data center bill advances to House floor. A House committee approved legislation Tuesday that would seek to have companies building and operating data centers to pay for electricity generation and transmission upgrades needed to power their facilities. As Engine has explained, data centers are a core piece of AI infrastructure, and measures impacting the cost for compute will touch the broader AI ecosystem.
France approves social media age ban. France’s parliament approved a law that will ban children under 15 from social media beginning in January 2027 and require users in France to verify their age to access social media platforms. France’s ban is the latest attempt by foreign countries and U.S. state governments to restrict young users’ access to large swaths of the Internet. While policymakers are rightfully focused on young users’ online safety, age verification requirements create significant tradeoffs, including higher compliance costs for startups and risks to users’ privacy, cybersecurity, and expressions online.
Mexico gets negotiations, Canada gets tariffs. This week, the Trump administration took diverging steps impacting North American trade following its decision not to renew the U.S.-Mexico-Canada Agreement earlier this month. Senior U.S. officials met with counterparts in Mexico for bilateral negotiations. Meanwhile, President Donald Trump used a Great Depression-era provision to announce 50 percent tariffs on certain Canadian goods, set to take effect in August—perhaps designed to force Canada to the negotiating table. Many of the points of negotiation are not explicitly related to startup issues, but pulling at the seams of the North American trade environment adds to uncertainty making it harder for startups and small businesses that rely on harmonized trade rules.
On the Horizon:
WED 07/29: The Senate Health, Education, Labor, and Pensions subcommittee on employment and workplace safety will convene a hearing to examine the impact of AI on the workplace at 2:00 PM ET.
Startup Roundup:
#StartupsEverywhere: New York, New York. Barnwell Bio is modernizing disease analysis in the poultry industry without compromising the efficiency and biosecurity that farmers depend on. Their metagenomic sequencing platform—analyzing all DNA present in a sample—converts traditional reactive disease testing into a proactive health management system. We sat down with CEO and co-founder, Michael Rhys, to discuss his transition from COVID-19 wastewater tracking to animal agriculture, the role of AI in characterizing the microbiome, and his experience navigating federal grants and research funding.