As
summer movie season
When things start picking up at the box office, the last thing Hollywood likely wants to hear is this single word: tariffs.
In
a social media post
on May 4,
President Donald Trump
announced he’s authorized his administration to slap
A 100% tax on films
created abroad because, according to him, “the Film Industry in the USA is facing an extremely rapid decline.” He described the benefits offered to attract directors and production companies to other nations as both a “national security risk” and “propaganda.” His statement ended with, “WE AIM TO HAVE FILMS PRODUCED IN THE UNITED STATES AGAIN!”
The film caught the movie industry off guard – directed by BenDavid Grabinski.
quoted Trump’s post
And included a “????????” on X — but mostly it led to bewilderment. Is the President genuinely aiming to revive film production in the United States, or is this a warning aimed at Hollywood, a place where numerous Trump critics reside?
George Clooney
Can he really impose a tariff on a film, or will this haphazard letter simply fade away? (Earlier that same evening, Trump had also announced he would)
reopening Alcatraz as a prison
and
ripped into Republican strategist Karl Rove
following a harsh appearance on Fox News. )
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“It’s absurd. This is a futile effort. It doesn’t constitute genuine policymaking,” he states.
Alex Jacquez
The individual mentioned serves as the chief of policy and advocacy at Groundwork Collaborative, an economic research organization, and previously held a position at the White House National Economic Council during President Joe Biden’s tenure. According to recent developments, this suggestion appears to have emerged spontaneously from Donald Trump, who discussed it casually with actor Jon Voight before posting about it on his platform, Truth Social. This has led various components of the U.S. trade system along with international entities to feel compelled to treat what was initially presented as more of a casual thought experiment as though it were both genuine and significant.
Let’s attempt to bring clarity to these possible film tariffs:
Which films might be impacted by President Trump’s tariffs?
Therefore, Trump is addressing two distinct issues in his post: first, foreign films being acquired by studios and released domestically; second, local productions moving abroad or to places like Canada as part of their filming process. Alternatively, he could be proposing tariffs on both scenarios.
This could potentially drive up the costs of international movies significantly, particularly for those eager to acquire highly anticipated films screened at festivals such as Cannes. For instance, an entity looking to secure something akin to the success of “Parasite” from South Korea may face a hefty 100% duty. A crucial consideration is whether this proposed tax will apply solely to cinema releases or also encompass television content. Streaming platforms like Netflix, known for bringing worldwide sensations such as “Squid Game” and “The Crown,” might reconsider their strategy heavily reliant on importing these shows, thereby impacting how viewers consume entertainment globally.
A bigger concern for Hollywood is that numerous high-profile blockbusters include filming segments conducted beyond US borders. As reported by research company ProdPro, in 2023, approximately fifty percent of expenditures made by American creators on film and television productions costing over $40 million were allocated internationally.
Additionally, film studios rely on global box office earnings for their movies’ success. In light of these trade disputes, China has stated that it will
“moderately reduce”
The quantity of American movies it brings in could see additional reciprocal tariffs under Trump’s recent film initiative, which would inflict further hardship on an sector yet to recover fully from before the pandemic era.
The successful film “A Minecraft Movie,” shot in New Zealand, is also where James Cameron is currently developing the next installment of the “Avatar” series. Meanwhile, Christopher Nolan has commenced work on “The Odyssey,” filming across multiple locations such as Morocco. Additionally, Marvel Studios recently kicked off production on “Avengers: Doomsday” in London. It’s worth noting how frequently productions choose Canadian urban centers like Vancouver and Toronto for their shoots.
A further point needs clarification: Will tariffs affect movies currently being produced or those that have already been finished? Take for instance “Minecraft,” which has become immensely popular—could this film end up owing significant money to the government due to these new taxes? Additionally, Tom Cruise likely won’t appreciate hearing about potential tariffs affecting “Mission: Impossible – The Final Reckoning.” This film was shot across various locations including Norway, Malta, and South Africa and is set to premiere at cinemas in just a few weeks.
One can envision a situation where Trump imposes tariffs to counteract the tax benefits that other nations offer to lure businesses,” Jacquez states. “Currently, we’re dealing with a significant tax legislation making its way through the process, which companies naturally aim to benefit from. Instead of attempting to draw film productions back to the U.S. via federal tax credits or similar incentives, he remains fixated on imposing import duties.
This issue has persisted throughout his entire career and public life. It’s as though there’s this single peculiar strategy that Trump employs which can resolve every problem.
How might average movie lovers be affected by Trump’s movie tariffs?
A lot of people in America are experiencing the effects of tariffs broadly, whether through fluctuations in the stock market or rising costs of common goods. Imposing levies on films might potentially impact Americans financially in an entirely different manner, or alter their cherished form of recreational escape.
Much likely hinges on the specifics of tariff implementation and their location. If production and distribution companies incur additional expenses for movies—which frequently have budgets reaching into the hundreds of millions—this added cost may result in higher ticket prices at theaters. Alternatively, platforms such as Netflix and Disney+ might choose to increase their subscription fees instead. As stated by Tim Richards, who serves as both the CEO and founder of Vue Entertainment, this scenario remains plausible.
told BBC Radio 4
That raises the question about what defines an American film: Does it depend on the origin of funding, the screenplay, the director, the cast, or the location where it was filmed?
The quantity of released movies might be impacted. Should financing become excessively costly for production companies—and filmmaking is already quite pricey—then a reduced number of films may end up being produced. Perhaps Disney focuses entirely on releasing more Marvel and “Star Wars” series but decides against taking on certain medium-budget initiatives. Additionally, considering how numerous film projects are presently in progress (or about to start), it would be challenging to redirect these productions back to the U.S., let alone determine alternative locations.
Primarily, discussions about movie tariffs are expected to intensify the “significant pessimism” surrounding our economy, according to Jacquez. “Individuals continually hear from the President of the United States that the costs they incur for various goods will rise,” he explains. “This message is delivered repeatedly and persistently. People are acutely aware of the President’s statements regarding tariffs. As a result, changes in consumer conduct have started to emerge. There is also an observable decline in consumer expenditure; although it isn’t pervasive as of now, it remains a key area of concern for us.”
Could President Trump really impose a tariff on a film?
The day following Trump’s declaration of tariffs on movies,
stocks opened lower.
This may not come as a surprise considering the impact of previous tariffs, however, it is quite surprising how little information there is regarding the administration’s strategy concerning Hollywood. It remains uncertain which entities or individuals would face these tariffs, when such measures would be implemented, or through what process they would be enforced.
However, here’s yet another question among many: Is it possible for a film to be taxed in this manner? After all, “Sinners” or “Thunderbolts*” wasn’t something shipped as cargo from China. The World Trade Organization has addressed this issue.
A ban on digital trade tariffs
Until 2026 – should films be classified as digital goods, this classification could complicate efforts to implement such tariffs unless resolved through legal means. In this scenario, would motion pictures showing in theaters face distinct treatment compared to streamed content? Alternatively, might feature films be viewed more like services, considering how patrons purchase admission for viewing experiences rather than ownership rights? “A multitude of perspectives can potentially apply here,” according to Jacquez.
If services are now becoming subject to tariffs, ‘you’re highlighting the U.S.’s competitive edge,’ according to Jacquez. ‘The U.S. is a major service exporter, including movies, and should this become another battleground in the trade conflict, one might witness potential countermeasures from other nations too. Up till now, our focus has largely been on importing and exporting tangible products.’
Like with other announced tariffs, perhaps Trump rolls back his movie plan – the White House is already starting to walk back the Truth Social announcement – or just moves on to something else that garners his attention. From filmmakers and studios to movie fans everywhere, we’ll all have to wait and see.
Contributors: Zac Anderson, USA TODAY, and Reuters
The article initially appeared on USA TODAY:
Trump wants to slap tariffs on foreign-produced movies: What we know