President Trump Announces Tariff on Foreign-Made Movies
President Trump has announced that he will impose a 100% tariff on movies "produced" outside the United States, citing national security concerns. In a social media post, Trump declared, "This is a concerted effort by other Nations and, therefore, a National Security threat."
The Motion Picture Association, which represents major Hollywood studios, declined to comment. However, their latest economic impact report, based on government data and released in 2023, showed that the film industry generated a positive U.S. balance of trade for every major market in the world.
Trump’s declaration was not entirely clear. Did he mean any movie, including independent foreign-language films destined for art house cinemas and movies that play exclusively on streaming services? The Motion Picture Association’s report suggests that the film industry is a significant contributor to the U.S. economy.
The Impact of Foreign Filming Locations
Technically, the vast majority of movies shown in American cinemas are produced in the United States. However, Hollywood has increasingly turned to foreign locales for the cameras-rolling part of the moviemaking process because it is much cheaper. Britain, Hungary, Australia, New Zealand, Canada, and other countries offer tax incentives that major movie companies, including Disney, Warner Bros., Universal Pictures, Netflix, and Amazon, have used. International locales also often come with lower labor costs.
As a result, thousands of middle-class film workers in the United States have seen their work evaporate. According to the International Alliance of Theatrical Stage Employees, roughly 18,000 full-time jobs have been eliminated in the past three years, primarily in California.
The Cost of Filming Abroad
Sometimes, the cost of shipping props and people overseas ends up costing studios more than they hope to save with tax credits. However, more often, producers say the cost of working in California is prohibitive. The budget is the budget, and those budgets keep getting tighter. Peak streaming is over, fewer people are going to movie theaters, and studios no longer get dollars from DVD sales.
Governor Gavin Newsom has pushed to more than double the available funding for the state’s tax incentive program. Under pressure from constituents and several coalitions that formed after the recent wildfires in Los Angeles and the surrounding area, California lawmakers have also put forward bills that would increase its film tax credit.
Trump’s "Special Ambassadors" for Hollywood
In January, shortly before his inauguration, Trump said in a social media post that he had named Mel Gibson, Sylvester Stallone, and Jon Voight as "special ambassadors" for the purpose of "bringing Hollywood, which has lost much business over the last four years to Foreign Countries, BACK — BIGGER, BETTER, AND STRONGER THAN EVER BEFORE!"
The actors, each an enthusiastic supporter of the president, have yet to do anything publicly, although Jon Voight, who is Angelina Jolie’s father, has met with a few unions and studio executives on a private fact-finding tour.
Matt Stevens contributed reporting.
