The American film industry is dying a “very fast death” because of the incentives other nations are providing to entice filmmakers, according to U.S. President Donald Trump, who on Sunday proposed a 100% tariff on films made abroad.
“This poses a threat to national security because it is the result of coordinated efforts by other nations. Trump stated on Truth Social that it is propaganda and messaging on top of everything else.
Trump declared that he was giving the appropriate government departments, including the Department of Commerce, permission to start enforcing a 100% tariff on all foreign-made movies that are subsequently imported into the US right away.
He continued: “WE WANT MOVIES MADE IN AMERICA, AGAIN!”
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Howard Lutnick, the secretary of commerce, stated on X: “We’re on it.”
Trump and Lutnick did not elaborate on the specifics of the tariffs’ implementation.
It was unclear if the levies would be based on box office receipts or production expenses, or whether they would apply to both movies on streaming platforms and those that were screened in theaters. On Sunday night, Hollywood executives were attempting to sort out the details. There was no quick response from the Motion Picture Association, which represents the big studios.
Hollywood legends Mel Gibson, Sylvester Stallone, and Jon Voight were appointed by Trump in January with the goal of reviving the industry “bigger, better, and stronger than ever before.”
For years, film and television production has been moving away from Hollywood and toward areas with tax breaks that lower production costs.
In order to draw in productions and secure a larger portion of the $248 billion that Ampere Analysis projects will be spent globally on content creation in 2025, governments all over the world have raised credits and cash refunds.
Every major media company, including Universal Pictures (CMCSA.O), Netflix (NFLX.O), and Walt Disney (DIS.N), opens a new tab and releases films in nations like Canada and Britain.
During Monday’s early trading, shares of Disney, Warner Bros. Discovery (WBD.O), Paramount Global (PARA.O), and Amazon.com (AMZN.O) all opened down.
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In response to Trump’s tariff plan, Australian and New Zealand presidents said Monday they will support their domestic businesses. While “The Lord of the Rings” films were shot in New Zealand, certain Marvel superhero films were shot in Australia.
In order to safeguard the nation’s “vital” film industry, the British media and entertainment union Bectu urged the government to act quickly.
“These tariffs, coming after COVID and the recent slowdown, could deal a knock-out blow to an industry that is only just recovering,” warned Philippa Childs, head of Bectu.
According to her, they would also jeopardize tens of thousands of freelance filmmaking jobs in the UK.
According to the British Film Institute, the value of film and high-end TV production in the UK increased by 31% from 2023 to 2024, reaching 5.6 billion pounds ($7.45 billion).
A request for comment from Reuters was not immediately answered by the government’s Department for Culture, Media, and Sport (DCMS).
“There is much more to lose than to gain.”
According to research firm ProdPro, about half of U.S. producers’ 2023 expenditures on film and television projects with budgets exceeding $40 million were spent abroad.
Scott Roxborough, the head of the Hollywood Reporter’s Europe bureau, stated, “I think the most likely consequence is not that more productions will be done outside of America, or that more productions would be done in America, but probably that just fewer productions will (be made).”
Hollywood’s hometown of Los Angeles has seen a nearly 40% decline in film and television production over the past ten years, according to FilmLA, a non-profit organization that monitors the industry.
Concerns that producers could look outside of Los Angeles and that backstage crews like camera operators, costume designers, sound technicians, and others might relocate rather than attempt to rebuild in local communities were heightened by the wildfires in January.
California ranked sixth among executives surveyed by ProdPro for the next two years, behind Toronto, Britain, Vancouver, Central Europe, and Australia.
In order to better compete with other places, Hollywood producers and labor groups have been pleading with Governor Gavin Newsom to increase the state’s tax incentives.
Following a string of trade disputes started by his administration, which have agitated markets and raised concerns about a potential U.S. recession, Trump has proposed a movie tariff.
Retaliation against Trump’s film tariffs would be disastrous, according to William Reinsch, a senior scholar at the Center for Strategic and International Studies and a former senior Commerce official.
“Our industry will be destroyed by the retribution. He said that it would be challenging to argue for movies on the grounds of national security or urgency, saying, “We have a lot more to lose than to gain.”
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