It’s another day ending in y, and President Donald Trump has decided to impose new tariffs, but this time he’s eyeing the world of cinema. Trump announced plans to impose a 100% tariff on movies produced outside the US.
The announcement, made via social media, framed the issue as a matter of national security, claiming foreign production incentives represent “a concerted effort by other nations” to undermine American filmmaking.
President Trump has instructed United States Trade Representative Jamieson Greer to “begin the process” of implementing the tariff on “any and all movies coming into our country that are produced in foreign lands.” The announcement leaves numerous questions unanswered about implementation, scope, and practical application.
Film industry experts note that tariffs typically apply to physical goods, not intellectual property or services like movies. This creates a lot of uncertainty about how such a policy would function in practice.
The tariff proposal addresses genuine concerns about American film production moving overseas. In recent years, major studios, including Disney, Warner Bros., Universal Pictures, Netflix, and Amazon, have increasingly filmed in countries offering substantial tax incentives, including Britain, Hungary, Australia, New Zealand, and Canada.
This shift has had real consequences for American film workers. According to the International Alliance of Theatrical Stage Employees, approximately 18,000 full-time jobs have disappeared in the past three years, primarily in California. These losses affect middle-class workers like camera operators, set decorators, lighting technicians, and makeup artists.
The migration of film production overseas stems from fundamental economic pressures. Studios face tightening budgets as theatrical attendance declines and streaming services struggle to achieve profitability. Many producers argue that California’s production costs have become prohibitive, forcing them to seek cheaper alternatives.
Foreign locations typically offer two key advantages: generous tax incentives and lower labor costs. These savings can considerably reduce a film’s overall budget, making otherwise unviable projects possible.
Obviously, California has not stood idle as production has moved elsewhere. Governor Gavin Newsom has proposed more than doubling the state’s film tax credit program to compete with foreign incentives. Additional bills to increase tax credits have been introduced following pressure from industry coalitions, especially after recent wildfires in the Los Angeles area.
Regardless, Trump’s latest move leaves many unanswered questions, such as
- Would it apply to independent foreign-language films destined for art house theaters?
- Would movies streaming exclusively on digital platforms be affected?
- How would it handle films with only partial overseas production?
- What about post-production visual effects work often completed by specialized firms worldwide?
The Motion Picture Association, representing major Hollywood studios, has declined to comment on the proposal.
Let’s not forget, the American film industry has yet to fully recover from the COVID-19 pandemic. While domestic box office grosses have rebounded from their 2020 low of $2 billion, they haven’t surpassed $9 billion since 2019, well below the pre-pandemic peak of nearly $12 billion in 2018. The number of theatrical releases remains approximately half of pre-pandemic levels.
Unlike tariffs on physical goods, trade barriers on intellectual property and services represent a whole new frontier, and one Hollywood and trade experts are not ready for.
