Open Standards in a Trade War: Why You'll Need an Escape Hatch When Politics Hits Your Stack

Open Standards and tech portability have never been more important—and soon, they could very well be your lifeline. In a world with impending trade wars globally, it may be naive to assume that because you work in software that you won't be impacted by tariffs, taxation and import restrictions. Just this week, tech lawyers warned that software sales could be covered by import tariffs that are looming on the horizon. This isn't just theoretical—it's the next economic bomb waiting to drop.

Going forward, whether it's an AI model you're betting your company on or a SaaS suite you've grown dependent on, it is going to be critical to be able to rip and replace any software as needed, if (or more accurately, when) the winds of geopolitics shift in the wrong direction.

Trends in Global Trade

The past few years have seen a growing, and now alarming acceleration away from globalism and free trade toward nationalism and protectionism. But what does that mean in practice when the software you rely on suddenly becomes caught in the middle?

• Protectionism and Trade Disputes: Across the globe, countries are increasingly adopting protectionist policies with teeth to safeguard or shore up domestic industries, secure critical resources or fulfill national security objectives. The clearest example of this is the multi-decade project for the US to become energy independent—and software could easily be next on the "strategic asset" list.
• Economic Fragmentation: While global trade volume is still technically growing, the rate of growth has plummeted compared to previous decades paired with a drop in foreign investment. This slowdown can be partly attributed to the increase in trade restrictions, and recent political events appear to have accelerated the trend toward economic isolationism.
• Supply Chain Uncertainty: Growing trade restrictions, and a general increase in political conflicts, are causing major disruptions to global supply chains. This is causing delays, skyrocketing costs, and potential contract losses for businesses caught in the crossfire. Thompson Reuters considers International Politics the #1 cause of increased supply chain risks, and we've only seen the beginning.

What Does This Mean for Software?

Moving beyond the trends contributing of economic nationalism and protectionism, there's an arsenal of trade restriction mechanisms that each economy leverages to achieve their economic and political goals. Here's some examples of how protectionist trends can result in real policies that impact the products we buy, even software.

• Tariffs: Taxes or duties imposed on imported or exported goods, making them more expensive than domestic products. Tariffs are a classic protectionist measure used to shield domestic industries or as retaliation in trade disputes. This is clearly the most popular form of trade restriction as it has dominated the news cycle over the last month or so with tariffs being both threatened and implemented against various countries globally—and software licenses are an easy target.
• Quotas: Limits on the quantity of specific goods that can be imported or exported. Import quotas restrict the supply of foreign goods, protecting domestic producers. Export quotas restrict what a foreign economy can buy, protecting strategically important products. The most famous of these quotas is the export quota placed on Nvidia GPUs to China—a stark example of how tech can become a geopolitical football overnight.
• Embargoes and Sanctions: Government-imposed bans on trade with specific countries or in specific goods, often used for political or security reasons. The biggest of these sanctions has been on Russia since the start of the Ukraine war, where the US and the EU attempted to ban all import and export to and from Russia. Your cloud provider or AI model could vanish from your tech stack overnight if that type of sanction was implemented more liberally.

While the movements of globalization and free trade throughout the 20th century helped to usher in a time of unprecedented peace and global prosperity, we have nevertheless clearly shifted back towards nationalism and economic protectionism.

With global IT spending now over $5 trillion globally, it is a massive target for taxation and restriction. This means that while software sales has been traditionally overlooked when trade restrictions are implemented, we should expect that in a world with greater protectionism that software sales will inevitably be taxed, restricted, or weaponized in some way.

So this begs the critical question: how should we prepare, as developers, users and buyers of software, for the potential of a software-based trade war that could pull the rug out from under your tech stack overnight?

The answer is Open Standards—your only reliable escape hatch.

Open-Standards and their Benefits

So what are Open Standards?

At their core, an Open Standard is just an agreement on technical details such as a schema, API, or SDK that the broader community can contribute to with the goal of standardization. We are very used to working with Open Standards in our daily lives as consumers, from the USB hardware standard that has sought to simplify the cables and connectors we use in our hardware to the HTML web development standard that has made it possible for the proliferation of software applications online.

The typical benefits of an Open Standard are:

• Reduced vendor lock-in
• Increased flexibility
• Greater interoperability between technologies

When it comes to consumer technology, interoperability is the primary benefit, but when it comes to software that we use and purchase to help us run our companies, increased flexibility and reduced vendor lock-in become critical—potentially existential—advantages.

And it is exactly this type of flexibility that we're looking for to reduce the risks associated with tariffs and trade restrictions that could otherwise leave your business high and dry.

Why Open Standards Matter Now More Then Ever

Typically what we hear in the news is that trade wars impact hard goods and commodities. The impacted products that we conjure in our minds are commodities like steel, oil, lumber and natural gas or physical products like cars or GPUs. But software is fair game too.

This isn’t hypothetical; there’s recent precedent for a software-based trade war. In the past year global sanctions on Russia were expanded to include software as a result of the war in Ukraine. This was relatively novel at the time and felt like an extraordinary measure. But desensitization happens fast and software restrictions no longer feel extraordinary—they could become the new normal, and your tech stack could be next.

In coming trade wars it's entirely possible that software is hit with the double impact of government policy and a popular boycott. Where both consumers and businesses actively choose to cut spend if they believe it's going to a country they are in a conflict with—or face public backlash if they don't.

In a situation where you may be taxed, boycotted, or completely cut off from buying software from a given country, there is a significant amount of value in increasing flexibility and giving yourself the ability to hot swap software providers before your costs increase or you're locked out and left hanging.

This is where software that adheres to Open Standards fits in. The benefits of Open Standards are clear; reduced lock-in, increased flexibility and greater interoperability. Software providers that adopt Open Standards are signaling to their buyers that they don't want to force lock-in, they want to keep your business through quality and experience. The flip side to this is that if you've bought software that adheres to Open Standards, you can move providers easily if you have to. This means that if taxes, tariffs, or restrictions become too heavy handed for a given software provider, you can find a competitor not subject to those policies or restrictions and hot swap easily—before your business takes a critical hit.

Now the question is which Open Standards are the most relevant and helpful for your emergency exit strategy?

Which Open-Standards Should You be Aware Of

As I mentioned above there are Open Standards for everything from hardware to the software that underpins the internet. Most of these Open Standards are not relevant, so it's important to stay aware of the Open Standards that can specifically help you to avoid lock-in for your software spend as a business when the political winds shift.

OpenTelemetry
An open standard for Observability that defines a core set of APIs and SDKs that generate, collect and export telemetry data that helps to analyze software performance and behaviour. OpenTelemetry has been around for quite a while, is mature, and has a deep level of support in the Observability community—making it a solid lifeboat if your current monitoring solution becomes a casualty of trade wars.

OpenFeature
OpenFeature is an open standard for Feature Flagging that defines a core set of APIs that you can design your software or application around that can then be controlled by any of a number of 3rd party Feature Flag providers. Open Feature even has a Multi-Provider designed specifically to make it easy to swap between Feature Flagging tools when your current provider suddenly becomes politically toxic.

CloudEvents
CloudEvents is an Open Standard specification for describing event data in a common way. It’s stated goal is to “dramatically simplify event declaration and delivery across service, platforms and beyond!” Cloud Events has strong industry backing and solid coverage across programming languages, meaning it has you covered for your specific stack.

OpenMetrics
An Open Standard that spun out of the Open Source project Prometheus, with the goal of defining the de-facto standard for transmitting cloud-native metrics. OpenMetrics appears to be a smaller project, so we’ll be monitoring it to see if it gains traction.

There are many other Open Standards out there and the Linux Foundation and Cloud Native Computing Foundation try their best to support as many of them as possible. You can check out the wide variety of projects they support here.

Conclusion

We're in a time of growing nationalism, protectionism and global political conflict that's accelerating faster than most predicted. This conflict has traditionally been fought with tariffs, restrictions and taxes on physical goods, but in the future as global software spend continues to grow, we should expect that these trade restrictions will inevitably start to be implemented on software with little warning.

When—not if—the time comes that your software purchases are either restricted or the cost is arbitrarily increased due to political forces beyond your control, you can protect yourself and your software budgets by being prepared now. Choosing software that supports Open Standards is the best way to stay protected, because you can be confident that if you ever need to switch providers overnight, you won't be locked in when it matters most.

The writing is on the wall: build your escape hatches now, before the trade wars reach your tech stack.