The US film industry was on tenterhooks on Sunday evening after US president Donald Trump said he was instructing the Department of Commerce and the United States Trade Representative to implement a 100% tariff on all films coming into the country that are produced “in foreign lands”.
Posting on Truth Social, Trump said the US film industry was “dying a very fast death” as filmmakers and studios were being lured overseas by incentives, a situation the White House incumbent described as a national security threat. He signed off with the all-caps statement “We want movies made in America, again!”
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US studio, streamer and independent productions have shot in Canada, Eastern Europe, the UK, Australia and other regions for years to avoid high costs in places like Los Angeles, benefitting from attractive incentives, lower costs, and expert international crews.
No studio sources had commented on Sunday evening and there are many unknowns.
Trump mentioned film but not television in his post. He has paused implementing a flurry of tariffs on imported goods from around the world, with the exception of China. Films are essentially digital goods, and a World Trade Organization moratorium on countries imposing tariffs on digital goods.
It was unclear when and precisely in what form film tariffs would come into effect and whether they include post-production services. Until now Trump’s tariff proposals have not extended to services. Sources said the matter was complicated and would likely take time to come into effect. The White House incumbent is notoriously spontaneous and erratic and there remains the possibility that he will walk back some of his declaration and try to mitigate against runaway productions another way.
Nobody could say whether the proposed tariffs would affect American films shot wholly or partly overseas, and how tariffs would be calculated. Disney’s Marvel has a UK hub and Avengers: Doomsday began production in March. Sony/Marvel’s fourth Spider-Man instalment starring Tom Holland is scheduled to shoot in the UK later this year.
Universal has been shooting Christpher Nolan’s The Odyssey in Morocco and other locales, and is understood to be shooting part of the film in Los Angeles. Warner Bros operates Warner Bros Studios Leavesden in the UK and Screen reportedly recently that JJ Abrams’ next feature is in pre-production there. Netflix has a large international production schedule of originals and licenses film from all over the world.
Also top of mind was whether the tariff would be retrospective, impacting upcoming releases like Paramount/Skydance’s Memorial Day tentpole and Tom Cruise starrer Mission: Impossible – The Final Reckoning, and July release Fantastic Four: First Steps, which filmed at Pinewood Studios last year.
Trump’s edict has alarmed the independent business as it prepares to descend on Cannes for an intense week or so of rights trading and co-production talks. Independent producers in the US were encouraged by the introduction of the UK’s Independent Film Tax Credit and, separately, there will be much discussion around what qualifies as an American film.
A 100% tariff on films produced outside the US could in theory have deep ramifications for US buyers of international films, which rise to the fore at a festival like Cannes and can go deep into awards season. It was unclear if there would be a budget cap on films affected.
China, which is in an escalating trade war with the US and faces a 145% tariff on its goods entering the country, recently said it was limiting the number of Hollywood films it would import. American sales agents will now be wondering whether international buyers of their films will be forced to operate under reciprocal tariffs imposed by their countries.
California incentive
US production around the world has come into sharp focus in the last year or so as the impact of the 2023 Hollywood strikes led filmmakers, studios, and independents to shoot in other countries.
California Governor Gavin Newsom is pushing to more than double California Film & Television Tax Credit Program’s annual allocation from $330m to $750m, and two Bills are going through the state’s legislature to increase the scope and credit level.
Efforts have been underway to introduce a federal production incentive, which has support within the industry and touches on emotive subjects including economic development and jobs creation.
The issue would appear to be in lockstep with Trump’s policy of creating American jobs, Ironically the congressman who has been leading the charge for a federal production efforts, Adam Schiff, the junior senator from California, is not a Trump favourite after he was named lead manager of Trump’s first impeachment in 2019.
It remained unclear how Trump’s so-called special ambassadors to Hollywood – Mel Gibson, Sylvester Stallone, and Jon Voight – figure in all this.
Voight is said to be working on a plan, although no details have emerged. Besides their long associations with studios, Gibson and Stallone are also independent stalwarts who have directed, starred in and produced costly films built within the independent space.
Not so long ago Gibson told Fox News it was cheaper for him to fly an entire crew to Europe and pay for accommodation for a three-day shoot than it was to film for one day in Los Angeles.
FilmLA said in its latest report in April that feature production levels dropped by 28.9% in the first quarter and the agency has said 2024 was the second least productive year behind Covid-afflicted 2020.
Trump’s post on Truth Social in full
The Movie Industry in America is DYING a very fast death. Other Countries are offering all sorts of Incentives to draw our filmmakers and studios away from the United States. 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! Therefore, I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN!
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