Trump administration directs diplomats to fight data sovereignty laws

The Trump administration has ordered U.S. diplomats to lobby against attempts by foreign countries to regulate how American technology companies handle the data of foreign citizens. According to an internal diplomatic cable reported by Reuters, the directive instructs diplomats to actively oppose these data sovereignty laws, which govern how and where user data is stored and processed. The cable was signed by U.S. Secretary of State Marco Rubio, marking a formal diplomatic push by the U.S. State Department to counter international regulatory frameworks that target American tech firms. This order comes as countries around the world increase scrutiny of how technology companies and artificial intelligence firms use their citizens’ data.

The internal cable argues that data sovereignty laws threaten the advancement of artificial intelligence services and technology. Specifically, the document instructs diplomats to oppose what it characterizes as unnecessarily burdensome regulations, pointing directly to data localization mandates. In the cable, U.S. Secretary of State Marco Rubio wrote that such laws would “disrupt global data flows, increase costs and cybersecurity risks, limit AI and cloud services, and expand government control in ways that can undermine civil liberties and enable censorship” to describe the potential impact of these regulations. This directive reinforces the Trump administration’s historical opposition to strict regulatory approaches. This opposition is particularly directed at the European Union, which has led global regulatory efforts through frameworks like the General Data Protection Regulation (GDPR), the Digital Services Act, and the AI Act to limit how technology companies control and use citizen data.

Under the new order, U.S. diplomats must track foreign legislative proposals that promote data sovereignty. Instead of local mandates, the State Department is directing its representatives to promote the Global Cross-Border Privacy Rules Forum. The cable describes this international group as an organization designed to enable secure and reliable data flows across borders through international data protection and privacy certifications. By pushing for these alternative certification standards, the U.S. government aims to bypass localized storage requirements that it argues restrict the operations of American technology firms.

Why it matters

This directive signals a hardening of U.S. policy against data localization, setting up a direct clash with the European Union’s regulatory framework for AI and data privacy. As countries globally increase scrutiny over how technology companies handle user data, the U.S. is positioning data flow flexibility as a necessity for artificial intelligence development.