19 May 2025
- President Trump’s idea of imposing tariffs on foreign movies: A dangerous script for the future of trade in services and electronic transmissions?
- Side effects of the ‘tariff war’: Risks and realities of ‘origin washing’ in the ASEAN region
- The European Commission proposes stricter rules on freezing tuna to ensure consumer safety: A disguised restriction of trade?
- Recently adopted EU legislation
President Trump’s idea of imposing tariffs on foreign movies: A dangerous script for the future of trade in services and electronic transmissions?
By Stella Nalwoga, Tobias Dolle, and Paolo R. Vergano
On 5 May 2025, US President Trump announced in a social media post his intention to impose a 100% tariff on “any and all Movies coming into our Country that are produced in Foreign Lands”, alleging that other countries were offering attractive incentives to lure film production away from the US. President Trump described that situation as “a concerted effort by other Nations and, therefore, a National Security threat”. This announcement is among the latest in a series of trade actions proposed under the current US Administration’s America First Trade Policy, which has already resulted in a range of measures affecting imports of goods from most trading partners. The announcement not only raises serious legal and trade policy questions, but could, if adopted, lay the groundwork for further barriers to trade in services and on electronic transmissions.
This article examines the legal questions arising from the proposed tariffs on foreign movies, their compatibility with the legal framework of World Trade Organization (hereinafter, WTO), and the broader implications for trade in services and trade-related aspects of electronic transmissions.
Expanding the America First Trade Policy: The case of foreign movies
The current US Administration has been pursuing an increasingly expansive use of national security arguments in trade policy. Under the America First Trade Policy, various measures affecting trade in goods, but also trade in services, have been justified on grounds of threats to US national security. These include additional tariffs on a range of sector-specific imports into the US via Section 232 of the US Trade Expansion Act of 1962 (see Trade Perspectives, Issue No. 9 of 5 May 2025), as well as new and significantly higher fees on maritime transport services via Section 301 of the US’ Trade Act of 1974 (see Trade Perspectives, Issue No. 8 of 21 April 2025).
On 5 May 2025, President Trump relied on the same justification to suggest the imposition of a tariff of 100% on foreign movies imported into the US. According to President Trump, the proposed tariffs would aim at addressing the fact that third countries were “offering all sorts of incentives” leading to “Hollywood, and many other areas within the U.S.A., […] being devastated” and causing the US movie industry to die “a very fast death”. Consequently, President Trump authorised both the US Department of Commerce and the Office of the US Trade Representative (hereinafter, USTR) to “immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands”.
Indeed, the US film industry confirms that there is a concern that the US and, in particular, the US State of California, have been steadily losing movie production and related employment, with significant investment going instead to foreign locations. However, this trend appears to be driven by multiple factors, including the availability of unique and non-replicable filming locations abroad, the generous financial incentives that many countries offer to attract film productions, and the lower labour costs in many foreign markets compared to the US. Nevertheless, the US film industry expressed strong scepticism about the proposed policy solution, due to its lack of detail, disconnection from often globalised film production industry, and potential to provoke retaliation by third countries.
Many questions, few answers
President Trump’s announcement on social media raises important legal questions regarding the scope and implementation of such tariffs. First of all, it would need to be determined how a “movie” can be defined from a trade law perspective, given that, these days, movies are produced in digital format and often transmitted electronically.
When movies are traded traditionally on physical media such films stocks or DVDs, they are treated as goods and fall under the scope of the General Agreement on Tariffs and Trade 1994 (GATT). Today, though, the global distribution of movies primarily occurs through electronic transmissions (i.e., via data transfers through digital platforms and streaming services). As such, the cross-border trade in movies could more accurately be understood as electronic transmissions and digitally traded services, rather than trade in physical goods. Meanwhile, the production, distribution, and exhibition of movies involve a complex set of services, including motion picture production and distribution, sound recording, and broadcasting, which are classified as “audiovisual services” and fall within the scope of the General Agreement on Trade in Services (hereinafter, GATS).
Additionally, it remains unclear under what legal authority the tariffs would be imposed, what content would be covered, how it would be determined whether a film is “foreign-made”, how such tariffs would be calculated, and when and how the tariffs would be collected. Clarity on any of those questions is relevant because most major US film productions involve international collaboration and financing, filming across multiple countries, and post-production work performed in various countries.
Implications in view of the US’ WTO commitments
President Trump’s suggestion of additional tariffs on foreign movies must also be seen in the context of the ongoing discussions within the WTO on Customs duties applied to electronic transmissions.
For many years, WTO Members have agreed to a Moratorium on Customs Duties on Electronic Transmissions, which prohibits WTO Members from imposing Customs duties on electronic transmissions. The Moratorium was first introduced in 1998 and has, so far, been renewed at every WTO Ministerial Conference since then. In recent times, the Moratorium has been increasingly criticised by certain WTO Members and the extension had become uncertain at recent Ministerial Conferences. The Moratorium is again due for renewal at the upcoming WTO Ministerial Conference in Cameroon in March 2026. Tariffs on foreign movies could be considered as Customs duties on electronic transmissions. For now, given the existence and applicability of the Moratorium, such tariffs would not only contravene the commitments of WTO Members, including the US, under the Moratorium, but also jeopardise its fragile renewal efforts.
Instead of, or in addition to, tariffs, additional restrictive measures impacting foreign suppliers of audiovisual services can also not be ruled out. Importantly, the US has liberalised “audiovisual services”, including services relating to “Motion Picture & Video Tape Arts Production & Distribution Services” in its WTO Schedule of Commitments on Trade in Services. Therefore, any restriction impacting audiovisual services provided by foreign suppliers would likely contravene the US’ commitment to provide market access under Article XVI of the GATS. As such measures would likely result in the US treating foreign movies or foreign movie suppliers less favourably that its own ‘like’ services and service suppliers, this would constitute a breach of Article XVII of the GATS on ‘National Treatment’.
Given President Trump’s explanations on the rationale of additional tariffs on “foreign movies”, the US might invoke Article XIV bis of the GATS, which allows a WTO Member to take an otherwise WTO-inconsistent measure that “it considers necessary for the protection of its essential security interests”. However, it appears highly questionable that increased movie production outside of the US could be considered a threat to its national security interests justifying measures “necessary for the protection of its essential security interests”.
Serving US interests?
Taking measures against “foreign movies” may not serve the broader interests of the US, its film industry, and related industry sectors. The US services sector constitutes a substantial part of the economy, accounting for 76.4% of the US’ Gross Domestic Product in 2023. Unilateral and far reaching restrictions on movies and related services risk weakening the US global dominance in such services, while, at the same time, negatively affecting related services around the world.
The Managing Director of the European Services Forum (ESF), representing the European services sector, Pascal Kerneis, stated that the “announcement on films produced abroad, if confirmed, reaches a new dimension, aiming at the services world, and at the digital trade world where the US companies have a clear advantage”. US movie studio and streaming industry executives are also highly critical of the proposal, with one being quoted as saying that it would be “shocking and would represent a virtually complete halt of production”, but recognising that the US Administration would have “no jurisdiction to do this” and that such measure would be “too complex to enforce”.
As developments evolve, it is essential for interested stakeholders in the US and around the world to scrutinise their implications, engage actively, and ensure that any future trade actions are within the broader commercial interests of the industry and in line with international trade commitments.
For any additional information or legal advice on this matter, please contact Paolo R. Vergano
Side effects of the ‘tariff war’: Risks and realities of ‘origin washing’ in the ASEAN region
By Alya Mahira, Caitlynn Nadya, and Paolo R. Vergano
On 2 April 2025, with the stated aim of addressing trade imbalances, US President Donald Trump signed an Executive Order on Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits, imposing “country-specific reciprocal tariffs” with a baseline duty of 10%. China was the most affected, facing tariffs as high as an additional 145% across most goods, until agreement was reached on 11 May 2025 on a temporary rollback. Given the high tariffs, some exporters were, reportedly, already attempting to evade these high tariffs through ‘origin washing’, a practice referring to the misrepresentation of a product’s origin. In response to such fraudulent practices, certain Member States of the Association of Southeast Asian Nations (hereinafter, ASEAN), notably Malaysia and Viet Nam, tightened their controls over the issuance of certificates of origin. This article examines the implications of ‘origin washing’ amid the current trade tensions, the regulatory responses by affected countries, and the commercial implications for exporters.
Determining the origin of goods and the practice of ‘origin washing’
Rules of origin refer to the legal framework used by countries to determine the economic nationality of goods for the application of Customs tariffs and related measures, or other trade policy measures. A good is typically considered ‘originating’ if it is entirely produced or obtained in a specific country, or if it has undergone substantial transformation, in terms of form, use, or value, in that country. To attest that a good originates from a particular country, a proof of origin is required, which may take the form of a certificate of origin issued by the Customs administration of the exporting country or may be issued by the exporters themselves in contexts of self-certification.
Circumvention of the applicable rules of origin occurs when exporters attempt to evade tariffs or other trade policy measures by misrepresenting the origin of goods. A form of such misrepresentation, often referred to as ‘origin washing’, involves the rerouting or relabelling of goods to conceal their actual origin and, thereby, unlawfully benefitting from certain preferential treatment, such as lower or no tariffs.
The US-China tariff war and the rise of ‘origin washing’
The US’ concerns over China’s growing industrial dominance and perceived national security threats have persisted across successive administrations, culminating in President Trump’s second term with the adoption of ‘reciprocal’ tariffs. On 2 April 2025, the US Administration announced that China would be subject to an additional ‘reciprocal’ tariff of 34% imposed on all goods. China countered by imposing a tariff of 34% on all imports from the US. In response to China’s countermeasure, the US increased its tariff on Chinese imports to 84%, prompting China to implement a corresponding increase. On 9 April 2025, the US Administration paused the country-specific ‘reciprocal’ tariffs for 90-days for all trading partners, except for China. Due to China’s retaliatory tariffs, the US further increased the tariff on imports from China to 125%, which was again mirrored by China.
On 11 May 2025, the US and China reached a temporary agreement for the US to reduce its ‘reciprocal’ tariff from 34% to the baseline 10% and to revoke the additional retaliatory tariffs imposed earlier this year. Imports from China remain subject to the 20% tariff linked by the US Administration to the “national fentanyl emergency”, referring to the flow of illicit drugs into the US, and certain products remain subject to product-specific tariffs, namely a 25% tariff on steel, aluminium, automobiles, and automobile parts. As part of the Agreement, China lowered its retaliatory tariffs from 125% to 10%. These concessions apply for 90 days from 14 May 2025.
The prohibitively high tariffs for imports into the US from China had reportedly caused some exporters in China to already resort to ‘origin washing’ in order to bypass the US’ additional tariffs. Notably, goods are being transhipped through third countries, especially through Viet Nam or Malaysia, where only minimal processing or repackaging occurs, before the goods being falsely declared as originating in those countries. US online sellers have reported a surge in unsolicited offers to re-label Chinese goods with misleading “Made in Viet Nam” or “Made in Malaysia” labels. Advertisements on Chinese social media platforms also promoted services that facilitate the re-export of goods through third countries.
Therefore, ‘origin washing’ has become a critical issue for the US, with President Trump identifying “transhipping to evade tariffs” as one of the alleged forms of non-tariff trade fraud undermining the American economy. The US Senior Trade Advisor, Peter Navarro, specifically referred to Viet Nam, asserting that “China uses Viet Nam to trans-ship to evade the tariffs”, citing this practice as one of the main reason for imposing a 46% ‘reciprocal’ tariff on Viet Nam.
Curbing ‘origin washing’ and enforcing trade rules
The WTO Agreement on Rules of Origin requires WTO Members to ensure that their rules of origin are transparent; administered in a consistent, uniform, impartial and reasonable manner; and do not themselves create restrictive, distorting, or disruptive effects on international trade. A WTO Member could arguably be found in violation of its commitments under the Agreement on Rules of Origin if it were to permit systematic ‘origin washing’ by, inter alia, not properly administering the applicable rules of origin, not properly verifying claims, or failing to implement proper enforcement mechanisms.
Stricter oversight on certificates of origin for exports from ASEAN to the US
In response to the concerns relating to ‘origin washing’, on 15 April 2025, Viet Nam’s Ministry of Industry and Trade (hereinafter, MoIT) issued Directive 09/CT-BCT to prevent the illegal transhipments of goods. The Directive requires officials from the Ministry of Industry and Trade, the Customs Department, and other relevant units and agencies to implement stricter controls regarding the issuance and post-verification of certificates of origin, including through inspections of imported goods. The Directive further calls for stricter oversight of “Made in Viet Nam” labels to prevent origin misrepresentation of goods, both for export documentation and for consumer-facing labelling. Decision No. 103/QD-BCT, issued on 21 April 2025, permanently revoked the authorisation granted to the Viet Nam Chamber of Commerce and Industry (VCCI) to issue certificates of origin and certificates of non-manipulation, transferring these responsibilities directly to the MoIT.
Similarly, on 6 May 2025, Malaysia’s Ministry of Investment, Trade and Industry (hereinafter, MITI) announced that, effective immediately, the issuance of certificates of origin for exports to the US would be centralised under MITI, replacing the previous system, under which such certificates were issued by business councils, chambers, or associations appointed by MITI.
Centralising the issuance of certificates of origin under government control represents a concrete step by Viet Nam and Malaysia to address the increased scrutiny from the US and to reduce the risk of further trade tensions. This regulatory shift is intended to enhance the oversight regarding exports to the US, reducing the risk of or discrepancies and of ‘origin washing’.
Implications for exporters
The trade tensions between the US and China exposed certain regulatory shortcomings in the administration of rules of origin, evident from the widespread resort to ‘origin washing’ by Chinese exporters. The related concerns present an important opportunity for Viet Nam, Malaysia, and other ASEAN Member States, which are considered as key transshipment hubs, to intensify efforts to avoid further punitive measures from the US.
For compliant exporters, these regulatory responses are likely to enhance their credibility and trustworthiness in the eyes of their US counterparts. Yet, it may also result in longer processing times due to stricter verification processes, including audits and production site inspections. For instance, the President of the Malaysian International Chamber of Commerce & Industry, Christina Tee, expressed support for MITI’s move to centralise the issuance of certificates of origin for exports to the US within MITI, but also raised concerns on whether MITI’s system would be able to handle the increased workload. She warned of potential delays in the issuance of certificate for exports to other countries, which may affect shipment schedules and contract performance.
Exporters are advised to maintain detailed origin documentation and prepare for possible audits.
For any additional information or legal advice on this matter, please contact Paolo R. Vergano
The European Commission proposes stricter rules on freezing tuna to ensure consumer safety: A disguised restriction of trade?
By Amanda Carlota, Ignacio Carreño García, and Tobias Dolle
On 29 April 2025, the European Commission (hereinafter, Commission) published a draft Delegated Regulation proposing to amend Annex III to Regulation (EC) No 853/2004 laying down specific hygiene rules for food of animal origin, which sets the temperatures that freezer vessels must meet in order to market frozen tuna. The amended provisions introduce new requirements concerning the use of brine (i.e., a highly concentrated solution of salt in water and a common way to preserve food, particularly fish) at -18°C for tuna products other than canned tuna, such as sashimi-grade, steak, and salad-ready products.
This article provides an overview of the main proposed changes in the draft regulation and discusses how such changes would affect producers, especially non-EU exporters, who may not have the technical capabilities to comply with the new requirements.
The current rules on freezing vessels and issues of compliance
Regulation (EC) No 853/2004 lays down specific rules on the hygiene of food of animal origin for food business operators. Annex III, Section VIII, Chapter I, Part I.C, point 1 requires freezer vessels to “have freezing equipment with sufficient capacity to freeze as quickly as possible in a continuous process and with a thermal arrest period as short as possible, so as to achieve a core temperature of not more than -18 °C”.
According to point 7 thereof, “Where freezing in brine of the whole fish intended for canning is practiced, a temperature of not more than -9°C must be achieved for the fishery product. Even if it is subsequently frozen at a temperature of -18°C, the whole fish initially frozen in brine at a temperature of not more than -9 °C must be destined for canning. The brine must not be a source of contamination for the fish”.
Illegal placing on the market of tuna frozen in brine at -9°C as “fresh tuna”
In the Explanatory Memorandum to the draft Regulation, the Commission states that official controls carried out by national competent authorities and audits by the Commission, both in EU Member States and in third countries, had shown that a number of freezer vessels was not able reach the temperature of -18ºC for freezing tuna in brine and that certain food business operators illegally placed on the market as fresh tuna, tuna that had been frozen in brine at -9°C and should, therefore, only have been destined for canning.
In addition, the Commission found that certain operators had illegally used additives to change the colour of tuna frozen in brine at -9°C and make the fish look like fresh tuna. This is a fraudulent practice that exposes consumers to health risks, as it can lead to an excessive production of histamine and result in food poisoning. Notably, an increasing number of notifications have been issued on the EU’s Rapid Alert System for Food and Feed (RASFF) regarding the presence of histamine above the limit set in row 1.26 of Chapter I of Annex I to Commission Regulation (EC) No 2073/2005 on microbiological criteria for foodstuffs in vacuum-packed thawed tuna loins. EU Member States have taken measures following official controls, but more recent RASFF notifications show that these measures have not resolved the issue.
New requirements and consultations: onshore real-time temperature monitoring
In view of the above findings, the Commission seeks to establish conditions for freezing tuna on freezer vessels, to ensure that it is safe to consume. The draft Regulation foresees the introduction of rules to monitor the conditions of freezing tuna in brine at -18°C on freezer vessels. Notably, “Freezer vessels that freeze tuna in brine must be equipped with a system that (a) continuously monitors in real-time and records the temperature of the brine on board using electronic means of temperature measurement; (b) allows real-time onshore monitoring of the temperature of the brine by the food business operator”, the latter requiring the possibility of remote monitoring of the temperature of the brine from authorities on the ground. Furthermore, the food business operators of freezer vessels that freeze tuna in brine must provide access, upon request of the competent authorities, to the data on the temperature of the brine collected. The operators must also set up a validation plan regarding the freezing capacity of their vessels.
According to the Commission’s draft, consultations with the competent authorities of the EU Member States and stakeholders’ organisations had shown that recent technological developments have improved the freezing capacity of freezer vessels. Consequently, many food business operators have invested in the freezing capacity of their vessels so that their catch of tuna can be frozen in brine at -18°C and, therefore, potentially placed on the market as fresh tuna.
Prior to the publication of the draft Regulation, the Commission had consulted the public on the draft and received comments from various stakeholders. Industry groups from EU Member States welcomed the regulation, as it “clarifies rules for freezing tuna on board”, pursues a “level playing field between EU fleets, submitted to strict sanitary controls and certifications, and non-EU fleets exporting to the EU market”, and puts “an end to the bad practices regularly observed concerning the placing on the market of tuna products when the fish has originally been frozen in Brine at -9 °C”.
However, there has also been important concerns voiced from stakeholders outside of the EU. Industry groups from South Korea noted their concerns with the draft Regulation, stating that it was “currently not technically feasible to monitor the temperature of the brine from on shore in real-time”. Given these circumstances, they put forward the “request that the EU, in consultation with the Korean government, regard temperature records as in compliance (…) when they are verified by the competent authority in accordance with a flag state control framework, and either checked during sanitary inspections or submitted by electronic means upon request”.
Accessing the EU market for fishery products
The EU is the world’s largest importer of fish, seafood, and aquaculture products. Therefore, any regulatory changes, such as those for freezing tuna, may have important implications for trading partners. In the wider context of trade in fishery products and with respect to tuna imports into EU, it should also be noted that the Association of National Organisations of Fishing Enterprises in the EU, Europêche, requested to entirely exclude tuna from the scope of the EU-Thailand Free Trade Agreement (FTA) currently being negotiated, due to the potential negative impact on the EU’s tuna industry. According to Europêche, the inclusion of tuna in the FTA “would lead to a massive influx of imports, as Thailand is the world’s largest producer and exporter of tuna, with an annual production of approximately 470,000 tonnes of canned and prepared tuna”. The introduction of stricter rules on freezing tuna could be seen as a way to limit imports from certain countries, whose fleets cannot meet the requirements.
Compatibility with the WTO SPS Agreement: unnecessary trade restrictions?
The requirements in the draft Regulation that “freezer vessels that freeze tuna in brine must be equipped with a system that (a) continuously monitors in real-time and records the temperature of the brine on board using electronic means of temperature measurement; (b) allows real-time onshore monitoring of the temperature of the brine by the food business operator” raises questions about the proportionality of such requirements and their compatibility with the rules of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (hereinafter, SPS Agreement).
Notably, Article 5.6 of the SPS Agreement requires that WTO Members, “when establishing or maintaining sanitary or phytosanitary measures”, “ensure that such measures are not more trade-restrictive than required” to achieve food and feed safety. Furthermore, under Article 2.2 of the SPS Agreement, WTO Members must “ensure that any sanitary or phytosanitary measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence”.
The requirements in the draft Regulation that freezer vessels must continuously monitor in real-time and record the temperature of the brine on board, allowing real-time onshore monitoring of the temperature may be considered excessively burdensome for operators and not necessary to protect human health.
On 25 March 2025, the EU notified the draft Regulation to the WTO Committee on Sanitary and Phytosanitary Measures and WTO Members are invited to submit comments until 24 May 2025. Less trade restrictive measures than real-time monitoring from the ground appear to be available, such as checking the temperature requirements during inspections, or submitting the data upon request. In this regard, the EU’s draft Regulation, although aimed at protecting human health, could be considered disproportionate and as violating the principles of the SPS Agreement, particularly regarding proportionality and the avoidance of unnecessary restrictions to trade by putting an excessive burden on operators.
Stakeholders should review the Commission’s draft Regulation and consider providing comments through their Governments to the WTO SPS Committee.
For any additional information or legal advice on this matter, please contact Ignacio Carreño Garcia
Recently adopted EU legislation
Trade Remedies
Market Access
Food Law
Amanda Carlota, Ignacio Carreño García, Tobias Dolle, Alya Mahira, Caitlynn Nadya, Stella Nalwoga, and Paolo R. Vergano contributed to this issue.
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