U.S. Shift on Global Tech Rules Jeopardizes Effort to Counter China

WASHINGTON—The Biden administration’s abrupt shift on global technology rules has weakened a critical Asia trade agreement that was intended to help counter China’s growing clout in the region.

Rules facilitating digital trade, including the cross-border transfer of data on customers and supply chains, were expected to be a centerpiece of what is called the Indo-Pacific Economic Framework, or IPEF, a U.S.-led group of 14 nations. But the U.S. recently withdrew its support for those provisions, a decision that cut against the desires of some Asian allies who see common rules governing business data as a cornerstone building block for economic cooperation.