Foreign films could see 100% tariff in Trump plan to save Hollywood
According to the research firm ProdPro, projects with budgets over $40 million went outside the US in 2023. Tax incentives have made the move overseas lucrative.
As summer movie season begins and the box office is finally getting some momentum, it’s the one word Hollywood probably wanted to hear least: tariffs.
In a social media post May 4, President Donald Trump announced he’s authorized his administration to slap a 100% tariff on movies produced outside of the U.S. because, as he put it, “the Movie Industry in America is DYING a very fast death.” He called the incentives used to bring filmmakers and studio productions to other countries “a National Security threat” and “propaganda,” and concluded his message by writing, “WE WANT MOVIES MADE IN AMERICA, AGAIN!”
The post took the movie industry by surprise – director BenDavid Grabinski quoted Trump’s post and added a “?????????” on X – but mainly it was met with confusion. Does the president actually want to bring film production back to the U.S. or is this a shot across the bow at Hollywood, a home for many Trump critics like George Clooney? Can he actually levy a tariff on a movie or will this random missive just die on the vine? (In context, the same night Trump also announced he was reopening Alcatraz as a prison and ripped into Republican strategist Karl Rove after a scathing appearance on Fox News.)
Let’s try to make some sense of these potential movie tariffs:
What movies could be affected by President Trump’s tariffs?
So, Trump actually is talking about two different things in his post: foreign films that are bought by studios and distributed here, and domestic films that go overseas or to, for example, Canada as part of production. Or he might be wanting to levy tariffs on both.
It could make international movies pricier, for sure, especially for those wanting to purchase a buzzy film from Cannes or another film festival. In theory, someone wanting to buy, say, the next “Parasite” out of South Korea could be levied that 100% tariff. Another important question here: Would this tariff just extend to movies or would it also affect TV? Netflix, which imports global series like “Squid Game” and “The Crown” and makes them binge-worthy hits, might pull back on that extensive part of their business model.
More worrisome for Hollywood is the fact that many of its biggest blockbusters are filmed partly outside of the U.S.: In 2023, about half of the spending by U.S. producers on movie and TV projects with budgets of more than $40 million went outside the U.S., according to research firm ProdPro.
The hit “A Minecraft Movie” filmed in New Zealand, and that’s where James Cameron is working on the latest “Avatar” movie. Christopher Nolan is making “The Odyssey” in various places including Morocco. Marvel studios just started production on “Avengers: Doomsday” in London. Not to mention all the movies and TV shows that regularly use Canadian cities like Vancouver and Toronto.
Another aspect to be clarified: Would tariffs hit movies now in production or the ones already completed? That “Minecraft” movie is a huge hit – might it now owe Uncle Sam a hefty chunk of change? And Tom Cruise probably doesn’t want to hear about tariffs with “Mission: Impossible – The Final Reckoning” – which filmed in Norway, Malta, South Africa and assorted other locales – a few weeks from releasing in theaters.
How might average movie lovers be affected by Trump’s movie tariffs?
Many Americans are feeling tariffs in general, from the stock market to the increasing prices of everyday items. Tariffs on movies could conceivably hit Americans’ pocketbooks in a whole new way, or change up their beloved entertainment escapism.
A lot probably depends on how and where tariffs get levied. It’s not hard to imagine that if studios owe extra money on movies – which often cost hundreds of millions to produce and distribute – ticket costs could rise. Or streaming services like Netflix and Disney+ might raise subscription prices. Tim Richards, Vue Entertainment CEO and founder, told BBC Radio 4 that “a big part of this is what constitutes U.S. film: Is it where the money comes from, the script, the director, the talent, where it was shot?”
The number of movies that comes out could be affected. If it becomes inordinately expensive for studios to finance movies – and movies are already rather expensive – fewer films will get made. Maybe Disney goes all in on Marvel and “Star Wars” outings but doesn’t pull the trigger on some mid-tier projects. And with so many movies currently underway (or getting ready to be), it would be difficult to shift productions back to America, not to mention figuring out where they would shift to.
Tariffs likely mean more chaos, not to mention how it might affect the global movie business. Studios depend on international box office for their films’ success. Amid these tariff wars, China has already said that it will “moderately reduce” the number of U.S. films it imports. More reciprocal tariffs on Trump’s new movie plan would add extra pain to an industry that still isn’t back to its pre-pandemic heights.
But can President Trump actually levy a tariff on a movie?
The morning after Trump’s movie tariffs announcement, stocks opened lower. That might not be shocking given the effects other tariffs have had, but what is startling is the lack of any detail about the president’s plan for Hollywood. It’s unclear who or what would have tariffs levied on them, and when they would take hold, or how they would be enacted.
But here’s another of many questions: Can a movie even be taxed in such a way? It’s not like “Sinners” or “Thunderbolts*” was a good imported on a ship from China. The World Trade Organization extended a moratorium on digital trade tariffs until 2026 – if film is considered a digital good, that could make the tariff hard to enact without some legal wrangling. Or would movies coming soon to a theater be subject in a different way than streaming content?
Then again, like with other announced tariffs, perhaps Trump rolls back his movie plan 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.
Contributing: Zac Anderson, USA TODAY, and Reuters
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