*Originally published in JOTA.

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

The Brazilian government’s skill in negotiations with the Trump administration deserves recognition for having secured crucial exemptions to protect key sectors of our economy, including the aerospace, energy, and agricultural industries. While the 50% tariff still impacts important export products such as coffee and meat, our diplomacy shielded around 700 products, reaffirming its historic ability to build dialogue under challenging circumstances.

This significant, though still partial, victory shows that Brazil is capable of making its interests prevail by finding alternative paths in a measured way, avoiding explicit confrontations. And the moment is particularly timely to put this skill to use when it comes to the regulation of digital markets.

Trump’s letter to Lula explicitly links the tariff hike to the regulatory agenda, revealing that the current U.S. administration sees international trade and digital policy as interconnected issues. Not by chance, the Brazilian government left the negotiations with the task, in diplomatic language, of “expanding dialogue with big techs.”

In a press conference, Geraldo Alckmin indicated that there was no need for haste, or that international experience in social media regulation should be examined—pointing to a reassessment of pending regulations, both regarding competition in digital markets and content moderation on social networks, developed respectively within the Ministries of Finance and Justice.

But the legislative debate surrounding these regulations has long been underway in the country. On one side, Bill 2630, which aimed to regulate transparency and accountability on the internet, sank in the Chamber of Deputies after years of proceedings—ultimately leading the Supreme Federal Court to regulate the issue through “modulation” when ruling on the constitutionality of Article 19 of the Internet Civil Framework.

On the other side, Bill 2768, which seeks to regulate digital markets, was introduced in November 2022. It has gone through numerous public hearings and consultations, in addition to being the subject of in-depth study by the Finance Ministry, which put forward a new approach.

There was, therefore, a broad debate that incorporated assessments of international experience, identifying a set of concerns to be addressed in order to protect digital platform users and competition in the market. Should Brazil, in the face of Trump’s threat, shelve these efforts? That question has sparked, in response, an ideologically charged allusion to “national sovereignty.”

Instead of abandoning or indefinitely postponing the regulatory agenda, the real issue is how to promote national interests and mitigate risks mapped in the digital sphere, while at the same time maintaining trade relations in a hostile political environment.

True digital sovereignty must focus on the effective protection of Brazilian citizens, the domestic market, pioneering and successful innovations developed here—such as Pix—and the business environment. The way forward is certainly not to further inflame the climate with heated rhetoric, nor to insist on legislative impositions merely as symbolic gestures of sovereign power.

In the field of digital markets regulation, the diagnosis made by the Finance Ministry identified two main challenges: first, the difficulty of characterizing infractions given the sui generis aspects of a data-driven digital economy, and second, the excessive time required to analyze conduct and merger cases.

A radical solution would be to ban certain practices in advance, as the European legislation known as the Digital Markets Act did—a law that has been criticized for stifling innovation without clear evidence of economic benefit.

For this very reason, the Finance Ministry proposes an intermediate solution, which would grant new powers to the Administrative Council for Economic Defense (Cade) to eventually impose prohibitions on specific practices by big techs following an investigation.

But the Finance Ministry itself is already suggesting a series of regulatory measures below the level of formal legislation that could be effective in reducing the duration of infraction and merger proceedings, while also adapting the methodology for analyzing market power and harm in relation to digital services.

If we combine these measures with binding Cade to precedents of convictions in digital markets, we will have a regulatory outcome quite close to what would amount to ex-ante prohibitions by Cade under the Finance Ministry’s legislative proposal. This regulatory experience below the level of formal legislation, which has the advantage of not having to await the entire parliamentary deliberative process to be implemented, can even serve as a sort of “laboratory” of oversight—capable of convincing us, later on, of whether or not legislation along European lines is truly necessary.

Such an approach would allow Brazil to move forward in addressing its competition-related concerns while at the same time avoiding the political risk of proposing new legislation that could trigger unnecessary trade tensions, however arbitrary their motivations may have been. In this way, we follow our internationally admired diplomatic tradition of finding flexible and intelligent solutions to protect our sovereignty—this time, protecting Brazilians and our market effectively through institutional strengthening and agile oversight, that is, through a non-law, so that Trump does not see it.