On Sunday evening, Trump posted on his Truth Social platform stating that he has instructed the Department of Commerce and the U.S. Trade Representative to impose a 100% tariff \”on every movie entering our country that is produced abroad.\”
The film industry in America is facing an extremely rapid decline,\” he stated, expressing concern that other nations \”are providing various inducements to lure\” filmmakers and production houses away from the United States. \”This constitutes a coordinated action by foreign entities and thus poses a national security risk. Furthermore, this situation also represents messaging and propaganda!
It wasn’t immediately clear how any such tariff on international productions could be implemented. It’s common for both large and smaller films to include production both in the US and other countries. Big-budget movies like the upcoming “Mission: Impossible – The Final Reckoning,\” for instance, are shot around the world.
Incentive programs for years have influenced where movies are shot, increasingly driving film production out of California and to other states and countries with favourable tax incentives, like Canada and the United Kingdom.
Still, tariffs aim to steer consumers towards American goods. In cinemas, however, American-made films significantly overshadow local productions in the domestic market.
China has increased its local film output significantly, leading to the animated hit \”Ne Zha 2\” earning over $2 billion domestically this year. However, despite these impressive figures, most of the revenue was generated within mainland China itself. In contrast, the film only managed to secure earnings of approximately $20.9 million in North America.
The Motion Picture Association did not promptly reply to inquiries on Sunday evening.
The MPA’s data shows how much Hollywood exports have dominated cinemas. According to the MPA, the American movies produced $22.6 billion in exports and $15.3 billion in trade surplus in 2023.
Trump has made good on the “tariff man\” label he gave himself years ago, slapping new taxes on goods made in countries around the globe. That includes a 145% tariff on Chinese goods and a 10% baseline tariff on goods from other countries, with even higher levies threatened.
By unilaterally imposing tariffs, Trump has exerted extraordinary influence over the flow of commerce, creating political risks and pulling the market in different directions. There are tariffs on autos, steel and aluminum, with more imports, including pharmaceutical drugs, set to be subject to new tariffs in the weeks ahead.
Trump has long voiced concern about movie production moving overseas.
Shortly before he took office, he announced that he had tapped actors Mel Gibson, Jon Voight and Sylvester Stallone to serve as “special ambassadors\” to Hollywood to bring it \”BACK—BIGGER, BETTER, AND STRONGER THAN EVER BEFORE!”
US film and television production has been hampered in recent years, with setbacks from the COVID-19 pandemic, the Hollywood guild strikes of 2023 and the recent wildfires in the Los Angeles area. Overall production in the US was down 26% last year compared with 2021, according to data from ProdPro, which tracks production.
The group\’s annual survey of executives, which asked about preferred filming locations, found no location in the U.S. made the top five, according to the Hollywood Reporter. Toronto, the UK, Vancouver, Central Europe and Australia came out on top, with California placing sixth, Georgia seventh, New Jersey eighth and New York ninth.
The problem is especially acute in California. In the greater Los Angeles area, production last year was down 5.6% from 2023 according to FilmLA, second only to 2020, during the peak of the pandemic. Last, October, Gov. Gavin Newsom proposed expanding California’s Film & Television Tax Credit program to $750 million annually, up from $330 million.
Other US cities like Atlanta, New York, Chicago and San Francisco have also used aggressive tax incentives to lure film and TV productions. Those programs can take the form of cash grants, as in Texas, or tax credits, which Georgia and New Mexico offer.
Other countries have been taking over Hollywood’s film production capabilities,\” Trump stated to journalists at the White House on Sunday evening following his return from a weekend in Florida. \”If these nations aren’t interested in making movies within the U.S., we ought to impose a tariff on imported films.