Tariffs Briefing
APRIL 24, 2025 - THE TRADE WAR’S
EFFECT ON GEORGIA’S SERVICE ECONOMY


APRIL 24, 2025 - THE TRADE WAR’S
EFFECT ON GEORGIA’S SERVICE ECONOMY
The United States trade surplus in services rose to $293 billion in 2024, an increase of 5% from 2023 and 22% from 2022. The U.S. service sector (activities provided by other people) carries a trade surplus with almost every trading partner around the globe, most notably, China, the European Union, Canada, and Mexico. Today, businesses in the service sector account for 84% of private sector non-farm workers.
Georgia’s excellent business climate has attracted the headquarters of some of the largest service-providing companies in the U.S. In 2022, Georgia carried a $27 billion services trade surplus led by sectors such as business, professional & technical services, financial services, and transportation services. Georgia’s leading service export partners include China ($1.2 billion), Canada ($2.1 billion), and Mexico ($1.1 billion). For digital services alone, Georgia has $5 billion in service exports to the EU and $2.1 billion to the UK. All included, Georgia’s service industries employ 4.1 million Georgians.
Should retaliatory measures be taken to restrict, sanction or heavily tax the use of American services or service providers, large global markets would be upended, and business strategies could require rapid and potentially detrimental restructuring. Foreign countries could simultaneously look to bolster innovation in, and use of, their own domestic services companies, which would undercut American- and Georgia-based companies with investments in foreign assets, extensions, and contracts. U.S. leaders should consider how these measures could affect businesses’ ability to negotiate global partnerships, and what implications it could have for the communities these businesses support.
In anticipation of escalating trade tensions and the potential for retaliatory measures targeting the U.S. service industry, Georgia businesses, particularly those in fintech, logistics, IT, and professional services, should carefully evaluate their available options to diversify their exposure to international markets and build domestic resilience in their operations.
Business leaders can consider identifying markets with lower geopolitical risk potential, investing in compliance capabilities to meet foreign regulatory demands, and forming strategic partnerships with local entities abroad for the purposes of maintaining market access.
Continued engagement with state and federal lawmakers remains vital. The Georgia Chamber of Commerce continues to advocate for our members with Georgia’s Congressional delegation.
In 2020, North America created 40% of the global value in information industries. Countries could impose or expand DSTs targeting revenue earned by U.S. companies offering cloud hosting, online advertising, e-commerce, streaming, fintech, or SaaS platforms.
Requiring U.S. companies to store user data in the country it was generated or restricting cross-border dataflows, increasing operating costs, or effectively excluding U.S. cloud technology firms.
Banning U.S. tech companies from bidding on government contracts, either explicitly or through favorable incentives to local companies, could exclude Georgia-based companies from participating in public projects in the AI, cloud services, and telecommunications sectors.
Tariffs on specific imported goods such as aluminum and copper could greatly raise the price of telecommunications and utilities products, affecting the cost of these services and limiting capital improvements for Georgia and U.S. consumers.
Targeting U.S. shipping, air cargo, or logistics companies with extra inspections, audits, or environmental compliance reviews would decrease U.S. competitiveness, as well as hampering the global flow of goods.
Georgia boasts two of the busiest ports in the country with the Ports of Savannah and Brunswick, as well as a thriving freight cargo business operating out of Hartsfield-Jackson Atlanta International Airport. Decreased imports and exports would lead to decreased activity at Georgia’s ports of entry and demand for Georgia warehouse space and logistics industry.
Foreign licensing boards, trade agencies, and regulatory institutions could increase barriers for U.S.-based consultants, engineers, or attorneys to practice abroad.
Much like the digital services economy, countries could restrict U.S. professional firms from bidding on major infrastructure or development projects.
Imposing legal restrictions on how U.S. law, accounting, or consulting firms manage client data could make compliance so burdensome that firms are not competitive or forced to withdraw from new and existing contracts.
Countries could strengthen or expand local content quotas requiring domestic broadcasters and streaming platforms to prioritize locally produced content over U.S.-produced content.
Countries may explicitly or implicitly exclude U.S. productions from public grants, tax incentives, and co-productions.
Countries can issue warnings discouraging travel to or through the U.S., reducing tourism income as well as harming the domestic airline industry.
To prepare for a rapidly evolving global trade environment and protect Georgia’s service-based economy, business leaders should consider the following measures: Stay Connected
Conducting internal reviews to identify current revenue streams vulnerable to potential retaliatory measures by foreign countries will allow businesses to evaluate risk and build redundancy or mitigate potential disruptions.
Investing in regulatory and legal teams familiar with cross-border digital compliance, procurement rules, data governance, and risk management will provide businesses with the opportunity to remain competitive and informed in changing international markets.
Partnering with local firms in high-risk regions through joint ventures, licensing arrangements, or representative offices can ensure compliance with local regulations, business continuity, and market presence.
Staying engaged with the Georgia Chamber of Commerce will ensure the Georgia business community is heard on trade concerns.
United States Coalition of Service Industries, U.S. Services Exports Economy: Georgia
Tax Foundation, Digital Taxation Around the World
POLITICO Europe, EU readies counterstrike on Big Tech and US Banks Over Trump’s Mega Tariffs
Euronews, Union Calls on Commission to Reassess EU Public Contracts Amid Trade War
McKinsey & Company, Localization of Data Privacy Regulations Creates Competitive Opportunities
Reuters, EU Finds China Is Limiting Access to Medical Device Market
CNBC, Trade War Fallout: China Freight Ship Decline Begins, Orders Plummet
Capital Brief, Labor Flags Delay of Streaming Quotas Until After US Election