In a dramatic move, US President Donald Trump has reignited his protectionist stance, this time targeting the silver screen.
Claiming that Hollywood is undergoing a “very fast death” due to overseas competition, Trump has announced plans to impose a 100 percent tariff on foreign films.
In a Truth social post, Trump said that he had directed the US Department of Commerce and the US Trade Representative to immediately begin the process of imposing the tariff on “any and all” films produced in “foreign lands.”
He asserted that other countries are offering all sorts of incentives to draw American filmmakers and studios away from the United States. He wrote, “WE WANT MOVIES MADE IN AMERICA, AGAIN!”
“Hollywood, and many other areas within the U.S.A., are being devastated. This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda!”
Donald Trump
Later, when asked by reporters about the tariff, Trump claimed that the US was making “very few movies now.”
“Other nations, a lot of them, have stolen our movie industry. If they are not willing to make a movie inside the United States, we should have a tariff on movies that come in.”
Donald Trump
Trump did not elaborate on how such a tariff would work in practical terms, including whether it would be applied to Hollywood features that involve shooting and production across multiple countries.
Many American movies and shows are shot on location outside the United States.
Many foreign cities have offered large tax breaks to film and televisions studios to shoot movies and shows outside of Hollywood. That has led to a large number of productions to shift operations to places like Toronto and Dublin.
In addition to tax breaks, many foreign staff demand cheaper pay, making some movies more economically viable to produce.
Trump’s announcement follows his appointment in January of three film stars; Sylvester Stallone, Mel Gibson and Jon Voight as “special ambassadors” tasked with bringing back business that Hollywood has lost to other countries.
At the time, Trump said that the actors would be “my eyes and ears” as he set about instituting a “Golden Age of Hollywood.”
Hollywood has faced tough business conditions in recent years amid the fallout of the COVID-19 pandemic and the 2023 actors’ and writers’ strike.
Hollywood studios grossed about $30bn worldwide last year, down about 7 percent from 2023, according to Gower Street Analytics.
According to Gower Street Analytics, while last year’s performance was an improvement on revenues in 2020, 2021 and 2022, it was still about 20 below the pre-pandemic average.
Nonetheless, movie industry research firm ProdPro stated that the US remains a major film production hub globally despite challenges.
Its most recent annual report shows the country saw $14.54bn (£10.94bn) of production spending last year. That was down by 26% since 2022, though.
Tariff To Be First On Services
The tariffs on film production — if they come to pass — could be the first tariffs on services.
Films are intellectual property, not goods, so they represent a kind of service that is not currently subject to tariffs.
Trump has lambasted non-tariff trade barriers that other countries place on the United States, but he has so far limited America’s retaliation to traditional tariffs on goods.
Trump has hit China hardest with his tariffs salvo.
He argues that tariffs will boost US manufacturers and protect jobs – but the global economy has been thrown into chaos as a result, and prices on goods around the world are expected to rise.
Even before this most recent announcement, the US movie industry had been impacted by the fallout from Trump’s trade policies.
In April, China said that it was reducing its quota of American films allowed into the country.
“The wrong action of the US government to abuse tariffs on China will inevitably further reduce the domestic audience’s favourability towards American films.
“We will follow the market rules, respect the audience’s choice, and moderately reduce the number of American films imported.”
China Film Administration
Trump’s 100 percent tariff proposal could potentially spark retaliatory trade measures and isolate the American film industry.
Rather than resurrecting Hollywood’s golden age, it risks turning it into a relic.
READ ALSO: Government’s Mull for Concession Model Critical to Revive ECG
