Trade Perspectives©

Back

21 April 2025

The US issued a new Executive Order on Restoring America’s Maritime Dominance amid growing tensions with China: A new trade tide?

By Stella Nalwoga, Tobias Dolle, and Paolo R. Vergano

On 9 April 2025, amid escalating geopolitical tensions between the US and China, US President Donald Trump signed an Executive Order on Restoring America’s Maritime Dominance, which authorises specified US officials to take certain actions in order to “revitalize and rebuild domestic maritime industries and workforce to promote national security and economic prosperity”. Framed again as a matter of national security and economic revitalisation, the Executive Order lays the groundwork for significant trade actions targeting China’s maritime, logistics, and shipbuilding sectors that are poised to have significant implications for global trade.

This article examines the proposed actions set out in the Executive Order, their compatibility with WTO disciplines, and the broader implications for businesses.

Addressing China’s maritime dominance: Investigations by the USTR

On 12 March 2024, several US labour unions in the maritime, logistics, and shipbuilding sectors had filed a petition with the Office of the US Trade Representative (hereinafter, USTR) regarding China’s acts, policies, and practices to dominate their respective sectors. The petitioners sought relief pursuant to Section 301(b) of the Trade Act of 1974, as amended, which authorises the USTR to “address unreasonable or discriminatory acts, policies, or practices that burden or restrict U.S. commerce”. Section 301 is one of the tools in the US’ trade arsenal, in addition to the International Emergency Economic Powers Act, which served as the legal basis for additional tariffs on imports from Canada, Mexico and China, and the ‘reciprocal’ tariffs, as well as Section 232 of the Trade Expansion Act of 1962, which authorises national security-related tariffs in specific sectors, notably steel, aluminium, and automobiles.

Following an investigation, the USTR published a public report on 16 January 2025, concluding that China’s efforts to dominate the maritime, logistics, and shipbuilding sectors through “top-down industrial planning” were unreasonable, and burdened or restricted US commerce.

Zooming in on the proposed key measures

On 21 February 2025, the USTR published its proposed actions, which include charging “service fees” of up to USD 1 million per entrance at a US port for vessels operated by Chinese companies, up to USD 1.5 million for Chinese-built vessels entering a US port, and up to USD 1 million for maritime transport operators with orders for Chinese-built vessels; requiring a certain percentage of US exports to be carried on US-flagged vessels by US operators; and restricting access to US shipping data on the National Transportation and Logistics Public Information Platform (LOGINK). Notably, the USTR also proposed entering into negotiations with the US’ allies and partners to “counteract” and “reduce dependencies” on China.

The Executive Order directs the USTR to coordinate with the US Attorney General and the US Secretary of Homeland Security in order to “take appropriate steps” to enforce the chosen actions, as well as to “consider” imposing tariffs on: 1) Ship-to-shore cranes manufactured, assembled, or made using components of Chinese origin, or manufactured anywhere in the world by a company owned, controlled, or substantially influenced by a Chinese national; and 2) Other cargo handling equipment. The Executive Order also directs the US Secretary of Homeland Security to “enforce collection” of the Harbor Maintenance Fee and prevent cargo carriers, including Chinese-operated and Chinese-built vessels, from circumventing the fee by making port in Canada or Mexico and sending their cargo into the US via land.

Are the proposed measures WTO-compatible?

The compatibility of the USTR’s proposed measures with WTO law must be assessed primarily under the General Agreement on Tariffs and Trade 1994 (hereinafter, GATT 1994) and the General Agreement on Trade in Services (hereinafter, GATS). Authorising the USTR to impose tariffs on ship-to-shore cranes that are manufactured, assembled, or made using Chinese components would likely violate the Most-Favoured Nation (hereinafter, MFN) principle under the Article I:1 of the GATT 1994, which requires that WTO Members provide equal treatment to imported goods from all other Members. Note that, in United States – Tariff Measures on Certain Goods from China (DS 543), the WTO Panel found the additional duties imposed by the US pursuant to Section 301 the Trade Act of 1974 on certain products imported from China to be inconsistent with Article I:1 of the GATT 1994. The discriminatory port fees and conditional port access for Chinese-built vessels may also violate Article V of the GATT 1994, which requires WTO Members to ensure freedom of transit, and prohibits them from making distinctions based on, inter alia, the flag of vessels, the place of origin, or “any circumstances relating to the ownership of goods, of vessels or of other means of transport”.

The additional fees imposed on Chinese-built vessels entering US ports, as well as on maritime transport operators with orders for Chinese-built vessels, may be inconsistent with the MFN principle under Article II of the GATS, which applies to all WTO Members and service sectors. However, the obligations under Article XVI of the GATS on Market Access and Article XVII of the GATS on National Treatment only apply to the sectors inscribed in a WTO Members’ Schedule of Commitments. Given that the US made no commitments on maritime transport services, it is unlikely that the proposed measures violate these provisions.

The US has justified the measure as necessary for its national security. Notably, both Article XXI of the GATT 1994 and Article XIV bis of theGATS allow a WTO Member to take an otherwise WTO-inconsistent measure, “which it considers necessary for the protection of its essential security interests”. However, the WTO is unlikely to accept this as a justification. In United States – Certain Measures on Steel and Aluminium Products (DS 544), the US had invoked the national security exception to justify its imposition of additional import duties on steel and aluminium products from certain countries. The WTO Panel found that the measure was not “taken in time of war or other emergency in international relations”, as global excess capacity in steel and aluminium was not an “emergency in international relations”. Similarly, it could be argued that China’s maritime dominance has not caused an “emergency in international relations” within the meaning of the GATT 1994 and GATS, and thus the targeting of Chinese maritime transport operators and Chinese vessels would likely be deemed unjustified.

Higher shipping costs, trade disruptions, and business backlash

If implemented, the proposed restrictive measures on China’s maritime, logistics, and shipbuilding sectors would have considerable impacts on international trade, by dramatically raising shipping costs and significantly disrupting supply chains. The World Shipping Council (WSC) reports that 98% of ships that visit or dock in US ports could be affected by the proposed measures, since they would apply to any operator with a Chinese-built vessel in its fleet or on order. A study into the economic impact of the proposed measures revealed that higher costs due to the fees would cause US exports to decrease by almost 12% and reduce US GDP by 0.25%.

During the USTR’s public consultation, more than 300 US-based trade associations opposed the USTR’s proposed actions, claiming that the measures would increase shipping costs by at least 25%. The European services sector has also voiced concern, noting that the “combined and cumulative” fees would substantially increase costs for container vessels, which, according to the WSC, typically stop at 3 to 4 US ports per journey and would, therefore, be charged fees at each stop.  

The proposed measures need not even be implemented to have a disruptive effect on international trade. The mere issuance of the Executive Order, much like the recent ones concerning the imposition and suspension of ‘reciprocal’ tariffs, has already created an atmosphere of uncertainty and unpredictability in the commercial landscape. Operators are left questioning whether, and when, these measures will take effect, and if so, how they will be enforced. Fortunately for industry operators, there are indications that the USTR’s proposals will not be fully implemented. On 8 April 2025, USTR Jamieson Greer told the US Senate’s Finance Committee that the proposed fees were simply “proposed actions or series of potential revenue”, and that “not all” of them would be implemented.

Strategic rebalancing or systematic undermining?

If implemented, the USTR’s proposed actions and other measures mentioned in the Executive Order would have far-reaching implications for global maritime transport and logistics sectors.

Beyond that, such policies, which are seemingly incompatible with WTO rules, could inflict long-term and profound damage to the rules-based international trading system, and spark retaliatory measures from the US’ trading partners. Stakeholders should closely monitor the announcements and issuances by the USTR, so as to see which of the proposed actions, if any, the US decides to take.

Examining Indonesia’s proposed safeguards on plastic tarpaulin imports: At a crossroads between trade remedies and competition policy

By Alya Mahira, Caitlynn Nadya, and Paolo R. Vergano

On 18 September 2024, the Indonesian Safeguard Committee (i.e., Komite Pengamanan Perdagangan Indonesia) initiated a safeguard investigation into imports of plastic tarpaulins made of synthetic fibres. In response, on 4 March 2025, the Indonesian Competition Commission (Komisi Pengawas Persaingan Usaha) raised concerns about the potential impact of the possible safeguard measure on market competition, including the risks of fostering monopolistic practices. This divergence in institutional perspectives demonstrates the ongoing tension between trade remedy enforcement and competition policy in Indonesia, raising the question of whether the Government will factor in domestic competition when considering and imposing trade remedies.

This article analyses Indonesia’s proposed safeguard action through the lenses of international trade rules and competition laws, exploring its implications for both importers and domestic stakeholders.

Safeguard measures and competition oversight in Indonesia

Trade remedies, namely anti-dumping, safeguard, and countervailing measures, are trade policy instruments that enable governments to take remedial action against imports that are causing injury to domestic industries. A safeguard measure, which may take the form of tariff-rate quotas or additional tariffs, is a temporary import restriction that a Member of the World Trade Organization (hereinafter, WTO) may adopt where a surge of unforeseen imports causes or threatens to cause serious injury to a domestic industry. For WTO Members, including Indonesia, safeguard measures must comply with the Agreement on Safeguards, which sets out the rules for their application pursuant to Article XIX of the General Agreement on Trade and Tariffs 1994 (hereinafter, GATT).

In Indonesia, the Indonesian Safeguard Committee is the committee responsible for conducting investigations related to safeguard measures. The Indonesian Competition Commission, which is responsible for enforcing Competition Law and preventing unfair business practices, holds the authority to provide advice and recommendations on government policies related to monopolistic practices or unfair business competition, including those related to trade remedies.  The Indonesian Competition Commission, however, does not have the power to override the decisions of the Minister of Trade, who holds the responsibility of implementing trade remedies on the basis of recommendations made by the Indonesian Safeguard Committee or the Indonesian Anti-Dumping Committee. Between 2002 and 2012, the Indonesian Competition Commission repeatedly advised against anti-dumping duties on wheat flour imports, warning that they would benefit a single dominant domestic producer. Despite the advice, Indonesia’s Minister of Trade proceeded with the measures.

The safeguard investigation regarding plastic tarpaulins

From 2021 to 2023, imports of plastic tarpaulins, made of synthetic fibres increased at an average annual rate of 8.74%. The majority of imports originated from China (61.89%), South Korea (30.61%), and Viet Nam (7.49%). In response, the Indonesian Safeguard Committee initiated an investigation into the these imports, based on a request submitted by the Indonesian Olefin, Aromatic, and Plastic Industry Association, which represented two domestic producers. The investigation, formally notified to the WTO Committee on Safeguards, produced preliminary findings indicating serious injury or threat of serious injury to the domestic industry, citing declines in several key indicators, including reductions in domestic production and sales.

In light of these findings, the Indonesian Competition Commission advised Indonesia’s Minister of Trade against imposing safeguard measures on plastic tarpaulins. In its independent assessment, the Indonesian Competition Commission found the Indonesian plastic tarpaulins market to be oligopolistic, dominated by three local producers. It also concluded that the industry’s pressure stems primarily from restrictive import policies on key raw materials for the production of plastic tarpaulins, including low density polyethylene and high density polyethylene, while the domestic raw material supply is controlled by a single dominant supplier.

Between protectionism and market fairness: Indonesia’s safeguards dilemma

The Indonesian Competition Commission concluded that the imposition of safeguard measures would likely consolidate the market power of the petitioning domestic producers, lead to price increases, and reduce the availability of alternatives for micro, small, and medium-sized enterprises (hereinafter, MSMEs). These conclusions indicate that trade remedies should not be applied in isolation, particularly in markets that are already concentrated and lack competitive dynamics, and where the decline in domestic industry performance is also driven by external factors beyond a surge in imports.

In this context, alternative to the safeguard measures, the Indonesian Competition Commission recommended enhancing access to raw materials for plastic tarpaulin production, both domestically and through imports, along with enhancing oversight of businesses that dominate the domestic supply of these materials. Nonetheless, as there is currently no legal obligation for the Government of Indonesia to consider the impact of safeguards on domestic market competition, the views of the Indonesian Competition Commission carry limited weight in the decision-making process.

Ultimately, this raises a policy dilemma: Whether to uphold the principle of fair and anti-monopolistic competition in the domestic market by avoiding safeguards and addressing existing structural issues, thereby preventing market dominance by major players, or to adopt protectionist measures that restricts imports of plastic tarpaulin, both framed as protecting the domestic industry’s interest, but through opposing approaches.

Compliance with the WTO Agreement on Safeguards 

If Indonesia were to introduce a safeguard measure on imports of plastic tarpaulin, it would need to be adopted and maintained in accordance with the WTO Agreement on Safeguards. According to its Article 2, a WTO Member may only adopt a safeguard measure if the surge in imports is causing or threatening to cause serious injury to the domestic industry. According to Article 4 thereof, a serious injury is defined as “a significant overall impairment in the position of a domestic industry”, while a threat of serious injury arises when such impairment is clearly imminent, which must be determined on the basis of objective evidence and not mere conjecture.

The Indonesian Competition Commission’s independent assessment highlights that a more nuanced approach may be required to determine the element of “serious injury”, particularly when the surge in imports may be linked to structural issues such as limited access to raw materials. To ensure consistency with WTO rules, the Government of Indonesia must be able to prove a direct causal link between the increase in imports and the serious injury. Safeguard measures must also be implemented on a non-discriminatory basis, consistently with the Most-Favoured-Nation principle under Article I of the GATT.

In 2017, in the dispute of Indonesia – Safeguard on Certain Iron or Steel Products, the WTO panel found that Indonesia’s imposition of a safeguard duty on imports of galvalume from China, Taipei, and Viet Nam, violated the MFN principle under the GATT, as it was applied only to certain countries. To avoid repeating such instance of WTO inconsistency, safeguard measures imposed on imports of plastic tarpaulins must be applied equally to all WTO Members, without singling out key exporters.

Looking ahead: The future of industry, imports, and market dynamics

It remains to be seen whether Indonesia’s Minister of Trade will impose the safeguard measures in the near future, particularly amid diverging institutional perspectives. If imposed, the safeguard would be formally enacted through a Regulation by the Minister of Finance.

While the safeguards measure could offer short-term relief for domestic producers, it would risk raising market prices and operational costs for domestic industries and MSMEs relying on plastic tarpaulins, potentially creating overprotection in a market already dominated by few economic operators. This could stifle market competition and reduce incentives for innovation, highlighting the need for a stronger policy coordination between the Indonesian Safeguard Committee and Indonesian Competition Commission.

For any additional information or legal advice on this matter, please contact Paolo R. Vergano

EU Institutions divided on patentability of plants obtained by certain new genomic techniques (NGTs)

By  Amanda Carlota, Ignacio Carreño García  and  Tobias Dolle

On 8 April 2025, the European Parliament’s Committee on Environment, Food Safety and Public Health (ENVI Committee) voted in favour of entering into inter-institutional negotiations concerning the European Commission’s Proposal for Regulation on plants obtained by certain new genomic techniques and their food and feed, which had been published on 5 July 2023. The Commission’s proposal aims to establish EU rules for plants produced by new genomic techniques (hereinafter, “NGT plants”), which “provide new opportunities to alter the genetic material of an organism allowing the rapid development of plant varieties with specific characteristics”, as well as their food and feed.

This article examines how NGT plants are regulated under current legislation on genetically modified organisms (hereinafter, GMOs) and how this would change under the proposed rules. The article then examines the commercial implications of the proposal, focusing mainly on intellectual property rights.

New genomic techniques (NGTs) are different from established genomic techniques

New genomic techniques (NGTs) is an umbrella term used in the EU to describe a variety of techniques that can alter the genetic material of an organism and that have emerged or have been developed since 2001, when Directive 2001/18/EC on the deliberate release into the environment of GMOs was adopted. In many cases, NGTs can lead to more targeted and precise modifications to the genome than conventional breeding or established genetic modification techniques developed prior to 2001. Some of these modifications could also be produced in nature or obtained by conventional breeding techniques.

Among NGTs, there is targeted mutagenesis (i.e., newer techniques of mutagenesis that induce mutation(s) in selected target locations of the genome without insertion of foreign genetic material), and cisgenesis (i.e., the insertion of genetic material into a recipient organism from a donor). NGTs are different from established genomic techniques because they have novel features, for example, higher precision and speed in introducing the desired genetic modifications and the insertion of genetic material only from a crossable species.

Targeted mutagenesis and cisgenesis do not introduce genetic material from non-crossable species, whereas this is the case with established genomic techniques. In addition, in some cases, products containing or consisting of plants with genetic modifications introduced by NGTs cannot be differentiated from products containing or consisting of plants bred with conventional breeding methods by analytical methods, whereas this is always possible for established genomic techniques (see Trade Perspectives, Issue No. 1 of January 2022).

The status of NGTs under EU law

The Commission’s Proposal was issued following the judgment of the Court of Justice of the European Union (CJEU) of 25 July 2018 in Case C-528/16, which established that organisms obtained by mutagenesis are GMOs and are, in principle, subject to the obligations laid down by Directive 2001/18/EC, as the technique and methods of mutagenesis alters a plant’s genetic material in a way that does not occur naturally (see Trade Perspectives, Issue No. 4 of 28 February 2020). As a consequence of the judgement, on 8 November 2019, Council Decision (EU) 2019/1904 requested the Commission to submit a study on the status of NGTs under EU law.

According to the study conducted by the Commission, NGTs can provide multiple benefits, especially in the agri-food sector. NGTs “can make plants resistant to pests and diseases, needing less chemical pesticides (e.g. fungi-resistant maize or potato), or resistant to the effects of climate change (e.g. rain resistant wheat or drought-tolerant rice)” and “can also improve the nutrient content of vegetables for healthier diets (e.g. soybean oil with healthier fatty acid content), or reduce content of harmful substances such as toxins and allergens (e.g. potatoes with reduced acrylamide content)”.

Within the scope of the Commission’s proposal are plants produced by targeted mutagenesis and cisgenesis (including intragenesis, where the exogenous genetic material can be introduced with modifications), products containing or consisting of these plants, and food and feed containing, consisting or produced from these plants. At present, all NGT plants fall under the scope of the current EU legislation on GMOs, namely Directive 2001/18, Regulation No 1829/2003 on genetically modified food and feed, Regulation No 1830/2003 concerning the traceability and labelling of GMOs, and Directive 2009/41/EC on the contained use of GMOs.

The Commission’s proposal seeks to classify NGT plants into two categories:

‘Category 1’NGT plants obtained by targeted mutagenesis or cisgenesis, but that could also occur naturally or be made from conventional breeding techniques. They would be treated like conventional plants and would therefore be exempt from current GMO legislation, including the requirement to be labelled as GMOs.
‘Category 2’NGT plants that do not meet the criteria for ‘Category 1’. They would be treated as GMOs and covered by current GMO legislation. They would be subjected to risk assessment and authorisation before being placed on the market, and required to be labelled as GMOs.

Compared to the current framework under Directive 2000/18/EC, there would be essentially a deregulation of ‘Category 1’ NGT plants, which would be treated like conventional plants and would therefore be exempt from current GMO legislation.

Commercial implications – the matter of patentability of NGT plants

The matter of patentability of NGT plants has important commercial implications. The Commission’s proposal notes that many stakeholders, such as breeders and farmers’ organisations, have expressed concern about patents on NGTs, particularly “breeders’ access to patented genetic material and access by farmers to plant reproductive material from NGT plants, bearing in mind that certain NGT plants are undistinguishable from plants obtained by conventional breeding techniques”. On the other hand, CropLife Europe, an association that represents the crop protection sector, reportedly said that the proposed regulation provides farmers with better seeds, strengthens food systems, and promotes sustainability.

On 7 February 2025, the European Parliament adopted its negotiating position on the Commission’s proposal. With respect to patents, Members of Parliament (MEPs) voted in favour of “a full ban on patents for all NGT plants, plant material, parts thereof, genetic information and process features they contain, to avoid legal uncertainties, increased costs and new dependencies for farmers and breeders”. On 14 March 2025, the EU Member States’ representatives (Coreper) endorsed the Council of the EU’s negotiating mandate on the Commission’s proposal. However, the Council suggests a number of changes, including on patenting.

Under the Council’s mandate, companies or breeders applying to register a Category 1 NGT plant would have to submit information on all existing or pending patents, which would then have to be included in a publicly available database. Furthermore, on a voluntary basis, companies or breeders can also inform of the patent holder’s intention to licence the use of a patented Category 1 NGT plant under equitable conditions. The Council’s mandate also provides for the creation of an expert group on the effect of patents on NGT plants, as well as the publication by the Commission of a study on the impact of patenting on innovation, on the availability of seeds to farmers, and on the competitiveness of the EU plant breeding sector, with a special focus on how breeders can have access to patented NGT plants.

Conclusion

Inter-institutional negotiations between the Commission, Parliament, and Council will start in the coming weeks and months. Regarding patents, the Council’s position goes against the European Parliament’s position, which advocates for the prohibition of patents on natural plants and genes to ensure farmers’ access to all genetic resources for varietal innovation, particularly for small traditional seed companies that cannot afford licensing fees.

However, it should be noted that the representatives of the institutions are not strictly bound by the positions adopted. As the Regulation has not yet been formally adopted, changes to the final version remain possible. Interested stakeholders should contribute to the legislative process by interacting with their Governments, trade associations and other affected stakeholders.

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.

Follow us on Bluesky @fratinivergano.bsky.social

To subscribe to Trade Perspectives©, please click here. To unsubscribe, please click here.