Hello, @iamquizzical You ask a very good question. I think I have to agree with the expert reply, except that you need to declare the whole dividend, not the net dividend as income. (I think that was just an editing error.) But let's talk a little bit about why....
The dividends are being reported as passive income, so you don't have to pay wage taxes or self-employment taxes, which is why the investment expenses used to be deductible on schedule A, not directly against the income itself. Further, if you held the investment long enough, you get the lower capital gains tax rate on it (0, 15%, or 15% plus the net investment income tax.) So, from the tax writer's perspective you're getting a good deal already. Further, you're in the category of people who are taking advantage of investing to reap an income and so you are not particularly to be pitied and therefore entitled to special relief either.
So when they "gave" a bunch of tax relief in the tax cut bill, they took this one away altogether. Before it was limited various ways and therefore not a general above the line deduction anyway.
On a practical basis, these ADR fees are basically custodial fees, and now that we know about them we should take them into account when evaluating foreign domiciled investments, including the fact that they will not be deductible expenses any more than fees for personal financial planning, legal expenses, and meals at chicken restaurants. Still, I used to invest when I had to pay commissions, and I can take these fees in stride as well :-). It's just a little disappointing when I don't know it's coming, but life is like that.
You could avoid it if you were in the business of buying and selling, rather than holding for investment purposes, but then you'd be paying other taxes, and governments do get the right both to tax us and to change their mind from time to time about how to tax us.
