In an Aug. 15 announcement, the White House and U.S. Justice Department (DOJ) pledged to undertake “an effort to identify State laws that significantly and adversely impact the national economy or interstate economic activity and to solicit solutions to address such effects.” This project complements the White House’s earlier April 9 executive order directing the federal antitrust agencies to identify and eliminate anticompetitive regulations that distort markets and reduce economic growth.
The latest initiative, boosted by new “hot off the press” scholarly research, could lend further support to U.S. trade negotiations directed at dismantling anticompetitive market distortions (ACMDs) around the world.
The ACMD Problem
As the Aug. 15 announcement explained:
President Trump and his Administration have prioritized eliminating the “crushing regulatory burden” that has “made necessary goods and services scarce.” Deregulatory efforts will boost the American economy, relieve Americans of undue burdens, and make America affordable and energy dominant again. President Trump issued multiple Executive Orders to advance his deregulatory agenda and requiring the Executive Branch to put that policy into action. . .
Federal regulatory burdens are only part of the story. As President Trump has also recognized, in Executive Order 14260, State-level practices can drive up nationwide costs and undermine American safety and “Federalism by projecting the regulatory preferences of a few States into all States.” Anecdotal evidence and the experience of countless Americans across the country strongly suggest that State laws and regulations can significantly burden commerce in other States, raising costs unnecessarily and harming markets nationwide. For example, last month, the Department sued the State of California, Governor Gavin Newsom, Attorney General Rob Bonta, and other State officials over California laws that impose costly requirements on the production of eggs and poultry products, raising prices for American consumers in and outside of California.
The announcement described a strategy to root out state regulatory excesses, centered on identifying:
- state laws that significantly burden other states and thus harm markets nationwide;
- whether identified state laws may be preempted by existing federal authority and, if so, what authority;
- whether there may be federal legislative or regulatory means to address the identified state laws or regulations or the burdens they cause; and
- which federal agency has the subject-matter expertise to address concerns lawfully within the federal government’s authority.
The announcement is a bold step forward. The administration is now committed to undoing ACMDs at both the federal and state levels. This commitment strengthens the administration’s leverage in international trade negotiations to get U.S. trading partners to scale back their own regulatory distortions that harm American firms (and the trading partners’ economies).
This would be a “win-win” for all nations concerned.
Estimating ACMD Burdens
Scholarly studies show that the costs of ACMDs are enormous, running into the thousands of dollars per-American-family per-year. Furthermore, reducing those distortions would have far-reaching global economic consequences, as the nonpartisan Growth Commission’s August 2025 report on ACMDs and trade explains:
The benefits of reducing ACMDs are not marginal. Gains in GDP per capita translate into higher wages, broader market access, increased consumer choice, and fiscal space to address pressing domestic needs. For the United States, sustained growth through ACMD reduction offers the most viable strategy for reversing the rising debt-to-GDP trajectory without sacrificing public investment. For trading partners, reform unlocks latent economic energy and mitigates the political risks associated with stagnation, inequality, and capital misallocation. For developing countries, the reduction of ACMDs directly supports poverty alleviation and inclusive growth.
The Growth Commission report details specific major U.S. and foreign regulations that have ACMD characteristics. Moreover, it develops an econometric model that provides a basis for a tariff on ACMDs, based upon potential loss to economic wealth as measured in GDP per-capita.
A more extensive analysis of ACMDs is presented in an August 2025 book by trade expert and Growth Commission Chairman Shanker Singham:
Drawing on techniques from probabilistic methods and quantum mechanics, the book examines the possibility of a probabilistic model to assess the real impact of Anti-Competitive Market Distortions on GDP per capita growth around the world in a far more dynamic and real-time sense than has been possible thus far.
Next Steps
Implementing ACMD reform will be a challenging task. ACMDs typically stem from “rent seeking” by firms that successfully lobby governments for discriminatory regulations that disfavor existing or potential competitors. The costs of ACMDs are widely spread and may not be visible to the general public. ACMD beneficiaries have every incentive to fight dismantling their special privileges, while broadly dispersed harmed parties (including consumers, workers, and businesses) may be hard to organize in favor of reform.
The administration, nevertheless, may act directly to eliminate certain federal and state ACMDs, by:
- rescinding anticompetitive federal rules that have a weak legal basis (such rescissions may be challenged in court);
- suing to overturn restrictive state laws and regulations that seriously burden interstate commerce or seriously interfere with federal programs;
- presenting Congress with draft legislation to preempt state laws (where legally feasible) and/or repeal federal laws that generate ACMDs; and
- rallying the public to support regulatory and legislative reforms, without taking immediate legal accession (a lower-cost but longer-term strategy).
The administration’s ultimate strategy may reflect an evaluation of relative resource constraints, likelihood of success, and timing associated with pursuing these four options.
By being seen as seriously pursuing domestic reform, the administration may be able to garner deals to phase out particularly pernicious ACMDs. ACMD phaseouts might perhaps be incorporated into the language of bilateral or plurilateral agreements. The elimination of ACMDs might support mutually agreed-upon tariff reductions, as well. Newly released Growth Commission research could assist in this effort.
Successful ACMD reform would redound to the benefit of all trading nations.
