Global Digital Trade Rules Expand Rapidly Amid US-China Competition

· More than half of the world's 2,587 digital trade commitments have been made in the last four years, reflecting rapid growth in digital trade governance.

· A small group of countries is leading the development of global digital trade rules, including:

o Singapore, United Arab Emirates, and New Zealand (small, open economies),

o United States and China (the world's two largest economies).

· The expansion of digital trade agreements aims to address the evolving needs of the digital economy and modern international trade.

· Despite rapid growth, digital governance faces challenges due to:

o Unfulfilled commitments,

o Regulatory fragmentation,

o Increasing geopolitical and economic competition.

· Unlike traditional trade agreements, digital trade rules are evolving before a global consensus on leadership or governance has emerged.

· In December 2025, the United States launched the Pax Silica initiative to secure supply chains for:

o Artificial Intelligence (AI),

o Advanced semiconductors,

o Critical minerals,

o Along with trusted partner countries.

· Although China was not named directly, the initiative seeks to reduce dependence on non-market practices, widely viewed as targeting China.

· China remains a major participant in digital trade and is among the world's leading AI innovators.

· China supports multilateral digital trade initiatives, including the proposed 67-member WTO E-Commerce Agreement submitted in April 2026.

· Concerns remain over:

o China's control of critical minerals,

o State influence over digital industries,

o The growing use of trade measures as geopolitical tools by both major powers.

· The article concludes that establishing globally accepted digital trade rules has become a priority for governments as the digital economy continues to expand and geopolitical competition intensifies.

[ABS News Service/10.07.2026]

More than half of the world’s 2,587 digital trade commitments were made in the past four years, led by a small group of countries shaping a proliferation of global rules to meet modern trade’s needs. But the search for a viable template for digital governance is troubled both by unfulfilled commitments and increasingly coercive pressures in the global contest for control of the Great Digital Wave.

In May 2023, as it became increasingly clear that protectionism had become the hallmark, not the exception, in trade policy across the world's major economies, the Hinrich Foundation and Visual Capitalist partnered to publish The Great Wave off the G20 based on data documented by the trade-focused think tank St. Gallen Endowment for Prosperity.

In March, the Foundation partnered again with the Endowment, this time with its digital unit Digital Policy Alert, to publish Why Digital Is Different; Making Digital Trade Policy for the 21st Century, a casebook that amasses all 2,587 digital trade commitments that exist in the world and analyzes how each evolved over the last 25 years.

With Visual Capitalist, we again appraise another “Great Wave,” based on our work with the St. Gallen Endowment to take stock of the troubled crossroads on which the explosion of new global digital agreements is poised to descend.

As the Visual Capitalist graphic shows, there are two types of countries among the dozen or so leading the charge in global digital rule-making. They tend to be either small and open economies such as Singapore, the United Arab Emirates, and New Zealand, or they are the two largest economies in the world: the United States and China.

Most global trade agreements coalesce around a clear idea of who's in the driving seat. Digital is different. In digital’s case, the proliferation of new trade agreements comes before, not after, the bigger question is settled on who's going to lead global digital governance.

The US, after sitting out the "Great Digital Wave" for about a decade, is keen to reset the terms. In December 2025, the State Department initiated its flagship Pax Silica effort to secure supply chains for AI, advanced semiconductors, and critical minerals among a group of “trusted” participants (15 so far). The US says the putative alliance offers “shared efforts on investment security practices, infrastructure, and incentives.” It is aimed against “excessive dependencies” and “non-market practices.”

The State Department Declaration on Pax Silica does not refer to China. It didn’t need to. China is the only non-market economy among the dozen that dominate the new digital wave.

China is one of the world’s fastest innovators including in AI. It is an avid joiner of new digital trade deals, including the 67-member E-Commerce Agreement proposed for World Trade Organization implementation in April 2026. But China’s state control over critical minerals and the vertical stack are a source of worry for many other countries.

So too is the pattern of trade weaponization on both sides of the global contest for geoeconomic domination. So too are some of the extraterritorial demands increasingly seen in templates including for proposed US-led digital trade agreements.

The demand for digital trade rules is clear. The Great Digital Wave rose despite being riddled by regulatory fragmentation in some cases and honored only in the breach in others. How the world governs digital trade is now a matter of utmost priority to incumbent and aspiring hegemons alike. What would a truly global template for digital trade rules look like?