US diplomats ordered to lobby against data sovereignty laws threatening AI and cloud services

Trump Administration Takes Assertive Stance on Data Sovereignty

The Trump administration has ordered US diplomats to lobby against foreign data sovereignty laws, arguing that such regulations threaten the advancement of AI and cloud services while imposing unnecessary costs on American tech companies. In an internal State Department cable dated February 18 and signed by Secretary of State Marco Rubio, the administration outlined what it calls "a more assertive international data policy" aimed at countering data localization mandates worldwide 1

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The cable warns that data sovereignty initiatives would "disrupt global data flows, increase costs and cybersecurity risks, limit Artificial Intelligence (AI) and cloud services, and expand government control in ways that can undermine civil liberties and enable censorship," according to Reuters, which obtained the document 2

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. This directive represents a significant escalation in tensions between the United States and countries seeking to regulate how US tech companies handle citizen data, particularly as AI firms increasingly rely on massive stores of personal information to power their models.

Targeting European Regulations and GDPR

The State Department cable specifically cites the European Union's General Data Protection Regulation (GDPR) as an example of unnecessarily burdensome regulations that impose restrictive "data processing restrictions and cross-border data flow requirements" 2

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. The 2018 GDPR has imposed restrictions on transferring Europeans' data abroad and has led to a series of stiff fines on American tech firms. The cable's criticism of GDPR signals a direct challenge to the European Union's regulatory approach, which has included additional measures like the Digital Services Act and the AI Act designed to curb Big Tech control and exploitation of user data 1

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Bert Hubert, a Dutch cloud computing expert and former member of the board that regulates the Dutch intelligence services, characterized the shift as a departure from previous diplomatic approaches. "Where the previous administration attempted to woo European customers, the current one is demanding that Europeans disregard their own data privacy regulations that could hinder American business," he said . This more confrontational stance comes amid flaring tensions between the United States and the European Union over Washington's protectionist trade policies and support for far-right political parties 3

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Action Request and Global Strategy

The cable, described as an "action request," tasks US diplomats with tracking the development of proposals to restrict cross-border data flows and supplied talking points promoting the Global Cross-Border Privacy Rules Forum . This group, established in 2022 by the United States, Mexico, Canada, Australia, Japan, and others, aims to "support the free flow of data and effective data protection and privacy globally" 3

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The directive also addresses China's approach to data governance, claiming Beijing is "bundling enticing technology infrastructure projects with restrictive data policies that expand its global influence and access to international data for surveillance and strategic leverage" . China has tightened regulations over how its companies store and transfer user data in recent years, though the Chinese Embassy in Washington stated that Beijing "has always attached great importance to cybersecurity and data security" 4

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Implications for Privacy and Surveillance Concerns

The dominance of US tech companies in artificial intelligence—many of which draw on massive stores of personal data to power their models—has underlined European concerns around privacy and surveillance . Officials across the continent have increased pressure on American social media giants as data sovereignty initiatives have gathered pace, particularly in Europe. Data localization mandates vary in scope: some impose rules around where information is kept by requiring that data collected from a certain nation only be stored within that country, while others put restrictions around how data is shared, limiting its distribution to foreign companies 4

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This cable represents the latest in a series of initiatives aimed at thwarting European regulation of the digital sphere. Last year, Marco Rubio ordered diplomats to oppose the EU's Digital Services Act, which aims to make the internet safer by compelling major social media firms to remove illegal content, such as extremist or child sexual abuse material 3

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. Last week, Reuters reported that the United States planned to launch an online portal intended to help Europeans and others bypass censorship of material including alleged hate speech and terrorist propaganda . The State Department did not immediately return requests for comment on the cable, though it stated the US strongly supports cross-border data flows that promote growth and innovation while protecting privacy, safety, and free expression 3

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