Group urges Treasury to block Latin America digital taxes on U.S. companies

FIRST ON FOX: A nonprofit organization that advocates for protecting free markets is urging the U.S. Treasury Department not to enter into any trade or investment deals with Latin American countries unless they block digital taxes or regulations that would harm U.S. businesses.

Public Policy Solutions sent a letter to Treasury Secretary Scott Bessent on Tuesday saying protectionist measures seen in Europe unfairly targeting U.S. companies are spreading to countries in Central and South America – amid concerns that Latin America will impose a framework similar to that of Europe, which has imposed taxes and fines on U.S. companies that provide digital services.

Protectionist measures in technology policy impose regulatory restrictions or other limitations on foreign companies.

Public Policy Solutions also unveiled a new report accompanying its letter to Bessent, titled “European-Style Digital Hostilities Infecting the Western Hemisphere: America’s Backyard Is Becoming a Testing Ground for a Regulatory Nightmare.”

“A growing number of Latin American countries are exploring or implementing digital services taxes, data transfer regulation, innovation-killing AI legislation modeled after the EU, and competition frameworks that disproportionately burden U.S. businesses,” Public Policy Solutions co-founder and president Joe Grogan said in the letter.

“Some of our closest trading partners, including Brazil, Colombia and Chile, have proposed or adopted measures that resemble the EU Digital Markets Act, the Digital Services Act and other EU-style punitive regulatory frameworks,” Grogan said. “These policies risk reproducing in our own hemisphere the same distortions that have undermined fair competition in Europe.”

The European Union’s Digital Markets Act identifies and imposes additional regulations on seven so-called “gatekeepers” of information, including Alphabet, Amazon, Meta and Microsoft. At the same time, six of the targeted companies are American, one Chinese and no European, according to a Public Policy Solutions report published in June.

The Digital Services Act aims to crack down on illegal content and misinformation. However, groups like Public Policy Solutions, which are critical of the law, said it restricted free speech and claimed it imposed stricter rules on big businesses. Fifteen of the 19 companies labeled as a very large online platform (VLOP) are based in the United States, and Public Policy Solutions said this unfairly targets American companies.

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If a company does not comply with the regulations of the Digital Markets Act, fines are imposed. In April, the European Commission announced it would fine Meta 200 million euros – or more than US$232 million – for violating the law, saying Meta had failed to provide consumers with the option to use less personal data.

Meta did not immediately respond to a request for comment from Fox News Digital.

In April, the European Commission announced it would fine Meta 200 million euros – or more than US$232 million – for violating the law. (Manuel Orbegozo/Reuters / Reuters Photos)

At the same time, the group says American companies receive harsher sanctions than their Chinese counterparts for similar violations. For example, the group pointed to a $1.3 billion fine the EU imposed on Meta in May 2023 for sending European user data to the United States, while Chinese company TikTok was only fined $600 million in May for sending European user data to China.

But now the group is concerned that companies in Central and South America are adopting a similar strategy to Europe and unfairly targeting U.S. companies in ongoing trade negotiations with the Trump administration.

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For example, Chilean prosecutors filed an antitrust lawsuit against Google in May, in which they sought to impose $89 million in penalties for alleged market dominance. The trial came after Chile passed a law in 2024 aimed at regulating data collection by technology companies and cross-border data transfers, according to Public Policy Solutions. Under the new Chilean law, each violation carries a fine of $1.4 million.

Additionally, Brazil is considering legislation that the group says is modeled after the Digital Markets Law and would establish regulations for certain companies’ digital markets. Unlike the “gatekeeper” designation in the Digital Markets Act, the proposed Brazilian measure establishes a minimum revenue threshold that translates to approximately US$14 million, which would ultimately subject hundreds of tech companies to these regulations, according to the Center for Strategic and International Studies.

At the same time, Public Policy Solutions is also interested in Latin America’s ties with China in the technological field. While the first Trump administration banned the use of Chinese technology company Huawei and partially Chinese technology company ZTE for US government employees and contractors, due to national security concerns in 2018, Latin America became more dependent on Huawei.

For example, Public Policy Solution’s new report claims that Huawei’s business in Latin America grew 9% between 2021 and 2022, and the U.S. Institute of Peace reports that Huawei works with all major mobile and internet service providers in Latin America.

Likewise, the report notes that Brazil’s National Telecommunications Agency revealed in 2024 that Huawei had more than 44% share of Brazil’s 5G infrastructure.

The United States is currently actively engaged in trade negotiations with many countries, including Chile, Brazil, El Salvador, Guatemala, and Argentina.

Argentine President Javier Milei speaking at the World Economic Forum. (Fabrice Cofrini /AFP / Getty Images)

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As a result, Public Policy Solutions is calling on the Trump administration to crack down on those who engage in discriminatory digital policies that negatively impact American businesses, and for any future trade and investment agreements to block digital taxes or regulations that “discriminate against American innovators.”

Likewise, the group urges the Trump administration to “deny new partnerships or initiatives” to allied governments – until they decide to restrict CCP-linked access to sensitive data systems.

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“For too long, the European Union has used a protectionist regulatory approach toward the United States to use American technology and telecommunications companies as an ATM while protecting their own companies from competition,” Grogan said in a statement to Fox News Digital.

“We are now seeing these same misguided and unfair tactics being adopted by countries in our own backyard,” Grogan said. “Our latest report highlights the danger that Latin American countries will take a cue from the European model and drive a wedge into our key economic and security relationships. Meanwhile, they roll out the red carpet for an adversarial and unreliable partner: China.”