The international film industry woke up to the shock news on Monday that US President Donald Trump had taken to his Truth Social media platform to call for 100% tariffs of all films imported from “foreign lands” the night before.
A boggled US industry immediately pointed out tariffs would do more harm than good to Hollywood, which ran a trade surplus of $15.3bn in 2023, and made $22.6bn in exports, with a positive balance of trade in every major market in the world, according to the Motion Picture Association.
As well as questioning whether Trump has the authority to impose these measures, and the matter of the World Trade Organization’s moratorium on tariffs on digital goods, many have made the obvious point that US studios and streamers tend to own copyright to their productions. With regard to shooting outside the US, this means tariffs would damage the very industry they were ostensibly trying to invigorate.
Also, what about TV? It was not mentioned in Trump’s incendiary post.
Countries around the world with huge US inward investment sectors, from the UK to Canada, Australia, New Zealand, Hungary and Spain, quickly issued statements underlining both the collaborative nature of the global film industry and the need to build resilient local industries to preserve jobs at home.
On Monday, Trump appeared to row back from his blunt instrument statement, reportedly saying he did not want to do anything to harm the US film industry and the tariff proposal was just that, a proposal. Shock and awe achieved.
What happens next? Screen considers some of the likely scenarios.
US introduces a federal incentive
While it is widely agreed imposing a tariff on a service like film is the wrong tool for what Trump is trying to achieve, his tactics have cracked open a conversation that many in the US industry actually want to have. FilmLA’s latest report on the first quarter of 2025 said overall production in the Greater Los Angeles area had declined by 22.4% and features fell by 28.9% to 451 shoot days in the January to March period.
What is now being talked about with more urgency is the possibility of a competitive federal incentive, which could be combined with individual state incentives. This could deliver tax breaks on eligible expenses in line with countries such as the UK (25.5%), and Hungary (30%) and could work the way Canada’s 16% federal tax break can be harmonised with various province incentives.
At a state level, California governor Gavin Newsom is trying to more than double the California Film & Television Tax Credit Program from $330m to $750m to help attract production back to Los Angeles and the state. Newsom said on Tuesday that he is willing to work with Trump on a $7.5bn tax credit proposal to make it happen.
There is understood to be considerable support behind the notion of a US-wide incentive at federal government level, although progress has been slow. California Senator Adam Schiff has been advocating for a federal incentive for some time. However a bill would need to achieve bipartisan support in Congress, where the Republicans have a majority, and up until now it has not been a priority on the legislative agenda. The debate over the tariff proposal could change that, although an incentive would need to be substantial to counter the high costs of shooting in the US and working with unionised crews.
Governments strike individual deals with the White House
Film and TV organisations including the British Film Commission, Screen Ireland, the Spain Film Commission, Canadian Media Producers Association, and Screen Australia will work with their respective governments to forge individual deals with the White House that allow the Hollywood studios and the US streamers to protect their massive investments in film infrastructure around the world.
Canada has long been known as Hollywood North, while Disney and Warner Bros have huge studios in Australia. The UK houses studio complexes for Disney (Pinewood), Warner Bros (Leavesden, where it shot Barbie) and Netflix (Shepperton). Spain has long been Netflix’s major European base for film and TV and gateway to the Latino market. Talking of Netflix, the streamer has made a business model of nimbly navigating global financial incentives to find the most cost-effective locations to shoot.
These yield substantial economic impacts for each country. In the first four months of 2025 in the UK alone, 15 inward investment films, including Warner Bros’ Wuthering Heights, spent £592m in the UK, 94% of the total UK production spend on film.
A UK government spokesperson said “calm” discussions were ongoing with the US. “Talks on an economic deal between the US and the UK are ongoing… We are committed to ensuring these sectors can continue to thrive and create good jobs right across the country.”
US buyers spooked ahead of Cannes
Unfortunately this is the most likely short-term scenario. Although the immediate threat of 100% tariffs may not materialise any time soon – or ever – the very mention of them has already unsettled US buyers, a relatively small pool who have been cautious in recent markets, and financiers.
The timing for the international independent sector could not be worse one week ahead of the biggest film market in the world, just as optimism was returning to packaging and buying after the blows of Covid, the US strikes, and the Los Angeles fires.
The uncertainty around tariffs could mean US buyers think twice before acquiring a non-US film or, at the very least, insist on get-out clauses being inserted into all contracts if tariffs on the distribution of international films in the US are introduced in any form.
Buyers hoping to stockpile in Cannes would also need to complete transactions quickly before any such measures came in.
International producers may need to find alternative sources of funding while international sales agents will need to stay calm. As one UK-based exec said this week: “America is our biggest market and one which leads the rest of the world. The implications [of tariffs] for our industry could be seismic.”
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