*Originally published in Valor Econômico.

**This is an AI-powered machine translation of the original text in Portuguese

Despite the aura of insanity, Trump’s initiatives, although radical and opportunistic, have been consistent with his geopolitical strategy in the dispute for global hegemony with China and in the protection of the defense and technology industries that elected him.

The round of tariffs against countries considered “hostile” primarily protected U.S. industry. However, among the politically framed justifications were initiatives in those countries to regulate digital markets, which Trump viewed as disproportionate attacks on American technology companies. At its core, this was a facet of the race for technological dominance—particularly in Artificial Intelligence—in direct competition with Chinese companies, which have been advancing in several countries by offering AI-powered digital services.

In Brazil, we have already witnessed the enormous popularization of TikTok, especially among children and teenagers, the rapid rise of DeepSeek, and the market gains of Chinese e-commerce giants such as Temu, Shopee, Shein, and AliExpress, supported by efficient technologies for offer hyper-personalization and intelligent pricing. It is therefore no coincidence that the Ministry of Finance’s proposal to regulate digital competition, formalized in Bill 4675/2025, sparked a diplomatic tug-of-war with the Trump administration.

The war against Iran, in turn, is an attack on China’s New Silk Road (Belt and Road Initiative—BRI), an infrastructure investment strategy aimed at promoting trade and leadership in global issues, particularly in the field of technology. In this strategy, Iran has emerged as important for China’s presence in the Middle East and for securing oil and natural gas, especially after the intervention in Venezuela.

Iran, as a counterpart, receives from China connectivity and technological intelligence, including military capabilities, such as navigation systems (BeiDou, instead of GPS) and messaging systems, satellites for terrain mapping, and drone navigation and radar. Although some analyses consider that the blow is not severe enough to compromise Chinese industry, an omission in the face of the conflict may create a “credibility deficit” among countries of the Global South that have been seeking China as a technological anchor, which could have a relevant impact on its commercial dispute with the United States over digital markets. Brazil has not formally joined the BRI, but it seeks synergies with the Growth Acceleration Program (PAC).

Amid this dispute, the Chamber of Deputies is considering a vote on a “request for urgency” for the processing of Bill 4675. Inspired by European legislation, particularly the British model, the legislative proposal grants new powers to the Administrative Council for Economic Defense (Cade) to regulate digital markets ex ante (and not only curb anticompetitive practices ex post), imposing, among other measures, obligations of interoperability, access for competitors to platforms, and rules regarding the use of data. The proposal, based on a study by the Secretariat for Economic Reforms of the Ministry of Finance, is grounded in the assumption that the Competition Defense Law (Law No. 12,529/2011) does not contain sufficient instruments to govern complex digital ecosystems.

In 2025, however, in addition to digital markets in Brazil witnessing the growth of Chinese companies and facing new competitive pressures with the advance of artificial intelligence, we saw Cade carry out at least five important interventions in digital services, suspending practices by, for example, Apple, Google, and Meta, and entering into conduct adjustment agreements to protect competition. On the other hand, the corresponding European legislation, already in force, has been subject to criticism and revisions, for having hindered the launch of innovations and products, generated compliance costs, and limited the competitiveness of that continent.

The bill, in turn, presents important shortcomings. Its scope is not well defined and may impose limitations not only on U.S. leaders, but also on Chinese companies, domestic unicorns, and AI firms, which have been important drivers of competition. In addition, the new intervention procedure does not incorporate successful elements from Cade’s own experience, particularly the possibility of negotiation and consensual structuring of commercial practices that may be considered harmful, which enables faster resolution and a reduction in litigation.

The best path is to strengthen the tools already successfully employed by the agency and introduce institutional improvements, in order to increase the speed of intervention while maintaining the flexibility of the repressive, ex post approach to anticompetitive conduct. For example, the identification of agents with economic power and systemic relevance in the digital environment can be carried out in advance by Cade’s Department of Economic Studies, so that the agency focuses, in its investigations, only on harmful practices, such as exclusivity agreements and refusal to grant access to platforms, and can make use of preventive measures and cease-and-desist orders to contain deleterious effects on the market. Practices that are condemned may generate precedents, which create a presumption of illegality, signaling to market agents the risk associated with similar conduct in similar markets.

Another path is to revise Bill 4675 to incorporate Cade’s recent experience within a moderate ex ante approach. For example, the imposition of obligations could be limited to practices previously condemned by Cade, so that regulation is based on concrete experience, avoiding speculative interventions aimed at promoting competition. As in British regulation, there should be room for agents to present justifications for their commercial practices, in terms of benefits to consumers or to innovation. Such justifications could shape conduct adjustment agreements, which should also be expressly provided for in the law as a specific procedure.

In the face of the war, which reflects a true commercial battle and geopolitical dispute between the United States and China to become the global technological anchor, it may not be wise to try to predict the future and turn Cade into a regulator of markets in turmoil, where many uncertainties loom. The only certainty, however, is that the path is not urgency, nor haste.