WHAT YOU NEED TO KNOW
  • The U.S. administration’s tariff negotiations have caused a temporary pause in regulators’ pursuit of digital competition regulation, with countries wary of irking the United States. This trend will likely be short lived because domestic prosecution of Big Tech companies continues in the United States. Technology companies’ global exposure to political and antitrust regulatory risks remains high.
  • Online child safety is expected to gather pace as a regulatory trend in the region, with Australia’s landmark legislation banning social media usage for children to take effect later this year. New Zealand, Indonesia and Singapore have also taken steps to pursue new child safety regulations.
  • The administration of U.S. President Donald Trump will likely disrupt semiconductor supply chains with the imposition of tariffs after Section 232 investigations. Although the U.S. Department of Commerce has rescinded the AI diffusion rule, it is unclear whether its replacement will represent a substantive shift or simply reinstate elements of the earlier three-tier framework under a different guise.
ON THE HORIZON
  • The Section 232 investigation on semiconductors and electronics is expected to be completed before the end of this year. Even though the scope and content of the tariffs are not clear at the moment, Trump has announced that the duties will start at around 25 percent and progress higher during the year.
  • The Trump administration has announced a 100 percent tariff on movies produced outside the country. It is unclear whether the tariffs will also be applied to movies on streaming services and how these will be calculated.
  • Australia’s social media ban for children under 16 is expected to take effect by the end of the year, with public consultations on implementation starting in June.

Sector Overview and Forecast


Macrotrend Monitor

The first 100 days of the Trump administration have resulted in unprecedented executive action. The flurry of executive orders aimed at reshuffling the global supply chains, trade flows and the investment landscape is part of Trump’s broader agenda to put “America first.” In doing so, his policies are causing seismic shifts in global technology policy, particularly in the Indo-Pacific, where the impacts of trade-related uncertainty are being felt most.

Digital Competition Regulation Appears To Pause in the Indo-Pacific

The trend in the proliferation of European Union-style digital antitrust regulation in the Indo-Pacific has slowed and is unlikely to gather much momentum in the coming months. Most countries in the region will avoid drawing the ire of the United States while negotiations on trade tariffs are ongoing. The Trump administration vowed to protect U.S. technology companies from “overseas extortion and unfair fines” in a presidential memorandum released in February. Digital trade barriers were also outlined as a cause for “reciprocal tariffs.”

Even as progress on digital competition legislations slows, antitrust action in the courts continues. In the European Union and in Indo-Pacific markets like India and Japan, U.S. Big Tech firms have been found to engage in anti-competitive behavior, and regulatory actions have been imposed.

The U.S. Federal Trade Commission has also continued antitrust cases against Big Tech companies. Its recent judgments found that Big Tech companies monopolized different aspects of the digital market, and it has imposed remedial measures like hefty fines, business restructuring and the breakup of monopoly power. More cases are still waiting to be heard, which antitrust regulators across the world are likely monitoring closely. They are expected to act on their concerns about Big Tech in their own jurisdictions when the opportunity arises.

As a result, the current trends indicate only a temporary slowdown in digital competition policies in the Indo-Pacific in the coming months. Underlying concerns about monopoly market power and digital competition remain. U.S. technology firms can also expect increased exposure to political risks if countries decide to push back against U.S. tariffs by making them targets of their retaliatory action. For example, China has initiated antitrust probes of U.S. tech giants in response to tariffs and export restrictions imposed by the United States. Similarly, the European Union continues to prosecute Big Tech companies under the Digital Markets Act by levying large fines to underscore its stance on global technology policy.

Greater Focus on Online Child Safety

An emphasis on online child safety is emerging in technology regulation in the region after Australia’s law banning social media for children under 16 was passed late last year. The ban is expected to come into effect by the end of this year. The mechanisms for enforcement of the ban are unclear at the moment, with Australia collaborating with social media companies to test different age verification mechanisms. The eSafety commissioner, Julie Inman Grant, has outlined that public consultation on implementation mechanisms will begin June 5.

Despite operational challenges, the ban has resonated within the region and globally. New Zealand is the latest country to propose a draft bill modeled on the Australian laws to ban social media use for children under 16. Indonesia has also begun talks on an age restriction for social media and is conducting a data protection impact assessment. Communication and Digital Affairs Minister Meutya Hafid is considering introducing a law or presidential decree to safeguard children in the digital world. In Singapore, age restriction rules have been codified through the Infocomm Media Development Authority’s Code of Practice for Online Safety for App Distribution Services. In addition, the government is expected to table the Online Safety (Relief and Accountability) Bill in the second half of the year to enhance protections for victims of online harm.

Criticism of blanket bans like Australia’s usually revolve around enforceability and effectiveness. Nonetheless, more countries will likely follow with similar regulations after the implementation of age-verification mechanisms demonstrates their viability. This regulatory trend is expected to gather pace in the latter half of the year and into next year.

Subsector Highlight
Supply Chain Disruptions Incoming

While technology supply chains received a temporary respite from U.S. tariffs due to exemptions for semiconductors and some consumer electronics, a shock is expected with the completion of the Section 232 investigations in the coming weeks. The ongoing investigations are reviewing semiconductors and the whole electronics supply chain. Even though the scope and content of these tariffs are not clear at the moment, Trump has announced that the duties will start at around 25 percent and progress higher during the year.

The looming sector-specific tariffs could lead to inflation in technology supply chains and raise the costs of consumer electronics, regardless of how the administration negotiates its tariffs. Pressure from the Section 232 tariffs would also be felt in AI infrastructure development, which could slow as companies dial back commitments on data center construction. Other consumers of semiconductors, like automobile and industrial machinery manufacturers, would face decreased demand. The semiconductor tariffs would likely disrupt long-term investment decisions in technology supply chains as companies look to minimize political risks, decouple from China and consider reshoring manufacturing to the United States.

More Stringent AI Technology Diffusion Rules Expected

Greater oversight on AI technology diffusion and chip exports is likely in the second half of the year. This follows a recent report by the U.S. Congress, which labeled China’s DeepSeek AI platform a profound threat to U.S. national security. The bipartisan committee report recommended tightening export controls, improving enforcement of the restrictions and banning the use of DeepSeek and other Chinese-origin AI models on government devices.

Korea’s data protection authority noted that DeepSeek transferred user data to several firms in China and the United States without obtaining the necessary consent from users or disclosing the practice. So far, Italy, Australia, Taiwan and Korea have banned the application on government devices due to security risks.

The Trump administration has rescinded the previous administration’s AI diffusion rules, which divided the world into three tiers to determine who could access U.S. AI chips and model weights. The Bureau of Industry and Security is expected to issue a replacement rule, though the timeline remains uncertain. At the same time, the U.S. government is moving to strengthen export controls on overseas AI chips. Rather than signaling deregulation, these developments reflect a shift toward more targeted and strategic export controls on AI-related technologies.

Countries in the Indo-Pacific are also expected to make their export controls more stringent to comply with U.S. regulations. For countries and businesses in the Indo-Pacific that are importing semiconductors and AI models, this will likely increase compliance costs because the punishment and reputational damage from the leakage of chips and model weights could be severe with increased U.S.-China technology competition.

We will continue to keep you updated on technology developments as they occur. If you have comments or questions, please contact BGA Senior Director William Heidlage at wheidlage@bowergroupasia.com, BGA Senior Director Apoorva Kolluru at akolluru@bowergroupasia.com. or BGA Senior Director Faiz Law at flaw@bowergroupasia.com.

Best regards,

BGA Technology Team

A small ginko leaf

BowerGroupAsia