Introduction
Today's reflection arises from the surprising announcement by former President Trump about a 100% tariff on all films produced abroadIn a social media post, he justified the measure on national security grounds and instructed the United States Trade Representative to begin imposing tariffs on "each and every film" produced outside the country.
This decision generates important legal and commercial concerns, especially within the regulatory framework of the World Trade Organization (WTO)At the heart of the debate is the Decision 4.1 of the Customs Valuation Agreement (CVA) of the WTO (Valuation of Media Containing Software for Data Processing Equipment), together with the Declaration on Global Electronic Commerce, which established the prolonged moratorium on customs duties applicable to electronic transmissions, such as streaming.
Commercial distinction between goods and services
The United States—once a key proponent of digital trade liberalization—is now positioning itself on the opposite side, questioning the norms he helped createFor decades, WTO members have postponed the necessary but complex debate about the distinction between goods and services in the digital age. It's ironic, astonishing, and even entertaining that it's now The United States who challenges a system that it has so long defended.
Even before the WTO VPA, the question of how to value intangible assets was already being discussed within the framework of the Brussels Definition of Value (BDV)The question was as simple as it was profound:
Should customs authorities apply tariffs to digital goods?
La WTO Decision 4.1, adopted in 1984, offered a pragmatic response—at least at the time. It clarified that software recorded on physical media, such as magnetic tapes or disks, could be valued separately from the physical media:
“To determine the customs value of media containing data or instructions, only the cost or value of the physical media itself shall be taken into account. The customs value shall therefore not include the cost or value of the data or instructions, provided that it is distinguished from the cost or value of the media.”
However, the Decision was also clear on one essential point: Cinematographic, sound and video recordings were explicitly excluded from this preferential treatment.That is, according to the WTO, Movies should not be treated like software and they are fully subject to customs valuation when imported in physical format:
“The expression 'data or instructions' shall not include sound, cinematographic or video recordings.”
Furthermore, the Statement by the Chairman of the Committee At the time of adopting Decision 4.1 he added a visionary observation: Customs duties become irrelevant when data is transmitted digitally—an accurate prediction in this era of global streaming.
Tariff Moratorium on Electronic Commerce (Streaming Services)
This principle of not imposing tariffs on electronic transmissions was reaffirmed during the WTO Ministerial Conference in Geneva in 1998, where members adopted the famous moratorium on e-commerce, pledging not to tax digital transmissions:
“Without prejudice to the outcome of the work program or to the rights and obligations of Members under the WTO Agreements, we also declare that Members will continue their current practice of not imposing customs duties on electronic transmissions.”
In simple terms, A film transmitted digitally from abroad is not subject to tariffsWhile The same movie imported on DVD or hard drive can be recorded.
That difference created a powerful incentive for streaming services to conquer global markets, driving the growth of platforms such as Netflix, Amazon Prime and Disney+.
Conclusion: Streaming Fees?
President Trump's proposal threatens to dismantle this fragile balance. Notably This is not about defending the current system., but of reflect on the challenges ahead for digital streaming and the possible violations of WTO commitments.
Every day brings new challenges to old certainties. But few would have imagined that The United States would be the one to lead the attack against the rules it itself wrote..
The author is a CARF (Administrative Council of Fiscal Resources) Advisor, Doctor in International Trade Law, Professor, WCO Specialist and former Technical Officer, as well as former Tax and Customs Attaché.
