Hollywood is under threat: Trump’s tariffs could destroy the global film production model
30 September 09:26
US President Donald Trump has announced his intention to introduce a one hundred percent duty on all foreign films, effectively extending customs policy to the service sector for the first time. He wrote about this in his post on Truth Social, "Komersant Ukrainian" reports
Trump repeated his previous May promise, accusing other countries of “hijacking” the American film industry.
He did not specify either the timing or the mechanism for the possible introduction of a tariff, but emphasized that California, the heart of the American film industry, suffered the most from competition.
“Our movie business was stolen from the United States by other countries, just like stealing candy from a child. California, with its weak and incompetent governor, has been hit especially hard! So to solve this longstanding, never-ending problem, I will impose a 100% duty on all films made outside the United States,” Trump said in a statement.
If this initiative is implemented, it will be the first time that Washington’s customs policy is applied to services, not just goods.
According to Reuters, it is unclear on what legal basis the president plans to impose such duties. The White House has not commented on the mechanism of their implementation, as well as the major movie studios – Warner Bros Discovery, Paramount Skydance, Netflix and Comcast.
Background
Trump first proposed the idea of introducing duties on foreign films back in May, but did not explain the details at the time, including whether it would apply to individual countries or to all imported films in general.
Following his statement, a coalition of American film unions sent a letter to the president asking him to support tax incentives for film production in the United States. The initiative was intended to encourage the return of foreign film production to the US.
According to the Motion Picture Association, in 2023, the United States received a trade surplus of $15.3 billion in the film industry, exporting films worth more than $22.6 billion.
Hollywood is under threat
Analysts warn that the new tariffs could destroy the global film production model, which relies on international cooperation from filming to post-production.
“There is too much uncertainty. This move raises more questions than answers. Costs are likely to rise, and this will ultimately be passed on to consumers,” said Paolo Pescatore, PP Foresight analyst.
Film production is global
Studio executives have previously told Reuters that they do not understand how such a duty can be practically introduced, as modern films are often created by the joint efforts of several countries – filming, financing, post-production and special effects are performed in different parts of the world.
In recent years, Hollywood has increasingly filmed outside the United States, in Canada, the United Kingdom, and Australia, where there are favorable tax incentives for filmmakers. Even movies with the highest budgets are made there, from superhero blockbusters to series for streaming platforms.
Co-productions with foreign studios, especially in Asia and Europe, have become commonplace, with foreign partners providing financing, market access, and distribution networks.
However, industry representatives warn that the broad duty could also affect American workers involved in foreign projects, from special effects artists to film crews, whose work is often coordinated across several countries.
The film industry is one of the leaders in American exports
According to the Motion Picture Association, in 2023, the American film industry had a trade balance of $15.3 billion, and exports of films and television products amounted to $22.6 billion.
In May, after Trump’s first statement, a coalition of American film industry unions had already asked him to support tax incentives for domestic production rather than punitive tariffs.
What’s next
If the initiative comes into force, it could provoke trade disputes with US partners and significantly reduce the volume of international film production.
Analysts believe that this will not only increase the price of content for viewers, but also undermine Hollywood’s position as a global center of the film industry.
