On Sunday, US President Donald Trump announced a 100% tariff on foreign-produced films, stating that Hollywood was dying a “very fast death” because other countries were attracting filmmakers with generous incentives.
“This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda,” Trump said in a post on Truth Social.
Movies Made In America, Again
Trump said he was authorizing the relevant government agencies, such as the Department of Commerce, to immediately begin the process of imposing a 100% tariff on all films produced abroad that are then sent into the United States.
He added: “WE WANT MOVIES MADE IN AMERICA, AGAIN!”
Commerce Secretary Howard Lutnick posting on X said: “We’re on it.”
Neither Lutnick nor Trump provided any details on how the tariffs would be implemented.
Lack Of Clarity
It was unclear if the tariffs would apply to movies on streaming services as well as those shown in theaters, or if they would be calculated based on production costs or box office revenue. Hollywood executives were trying to sort out details on Sunday night. The Motion Picture Association, which represents the major studios, had no immediate comment.
In January, Trump appointed Hollywood veterans Jon Voight, Sylvester Stallone and Mel Gibson to bring Hollywood back “bigger, better and stronger than ever before”.
Better Incentives Elsewhere
Movie and TV production has been exiting Hollywood for years, heading to locations with tax incentives that make filming cheaper.
Governments around the world have increased credits and cash rebates to attract productions and capture a greater share of the $248 billion that Ampere Analysis predicts will be spent globally in 2025 to produce content.
All major media companies, including Walt Disney, Netflix and Universal Pictures, film overseas in countries such as Canada and Britain.
In 2023, about half of the spending on movie and TV projects with budgets of more than $40 million went outside the US, according to research firm ProdPro.
Film and television production has fallen by nearly 40% over the last decade in Hollywood’s home city of Los Angeles, according to FilmLA, a non-profit that tracks the region’s production.
US Falling Out Of Favour
The January wildfires accelerated concerns that producers may look outside Los Angeles, and that camera operators, costume designers, sound technicians and other behind-the-scenes workers may move out of town rather than try to rebuild in their neighborhoods.
A ProdPro survey of executives found California was the sixth most preferred place to film in the next two years, behind Toronto, Britain, Vancouver, Central Europe and Australia.
Hollywood producers and labour unions have been urging Governor Gavin Newsom to boost the state’s tax incentives to better compete with other locations.
‘Lot More To Lose’
Trump’s proposed movie tariff follows a series of trade conflicts initiated by his administration, which have roiled markets and led to fears of a US recession.
Former senior Commerce official William Reinsch, a senior fellow with the Center for Strategic and International Studies, said retaliation against Trump’s film tariffs would be devastating.
“The retaliation will kill our industry. We have a lot more to lose than to gain,” he said, adding it would be difficult to make a national security or national emergency case for movies.
(With inputs from Reuters)
