The US Trade Representative Katherine Tai has withdrawn longstanding US digital trade demands in World Trade Organization (WTO) talks, allowing the US Congress the space to regulate big tech firms, according to her office. United States administration's 2019 proposals insisting on WTO e-commerce rules that promote free cross-border data flows and prohibit national requirements for data localization and software source code reviews have been revoked. Decision was made during a meeting of the WTO's Joint Statement Initiative on E-Commerce in Geneva.

Senator Ron Wyden, who chairs the Senate Finance Committee, described the move as a "win for China," claiming that it would strengthen China's internet censorship and government surveillance model. On the other hand, some lawmakers, including Senator Elizabeth Warren, praised the withdrawal, as it rejects efforts by big tech lobbyists to exploit trade deals to undermine regulation.

The decision aligns with the current administration's goal of strengthening regulation of large technology firms and reflects ongoing digital trade negotiations in the U.S.-led Indo-Pacific Economic Framework for Prosperity (IPEF) group. However, concerns have been raised about potential disadvantages for U.S. firms and the impact on international digital trade relationships. The U.S. Chamber of Commerce opposes the withdrawal, arguing that the digital trade principles, included in the 2020 U.S.-Mexico-Canada Agreement, have supported the success of U.S. tech firms globally. The U.S. remains an active participant in the WTO e-commerce talks.