President Donald Trump has launched a new salvo in his tariff war by targeting films produced outside the U.S.
In a Sunday night post on his Truth Social platform, Trump stated that he had authorized the Department of Commerce to impose a 100% tariff “on all Movies entering our Country which are produced abroad.”
He wrote, “The movie Industry in America was DYING very quickly. Other countries were offering all kinds of incentives to lure filmmakers and studios from America. This is a concerted attempt by other Nations, and therefore, a National Security Threat. This is not only propaganda and messaging, but also a concerted effort by other nations.”
The exact way that a tariff could be applied to international productions was not immediately apparent. Both large and small films often include production in the U.S. as well as other countries. The world is a place where big-budget films like “Mission: Impossible- The Final Reckoning” are shot.
For years, incentive programs have had a significant impact on where films are shot. Film production is increasingly moving out of California to states and countries that offer favorable tax incentives.
Tariffs are aimed at directing consumers to American products. In movie theaters, American movies dominate the domestic market.
China’s domestic film production has increased, culminating with the animated blockbuster “Ne Zha 2”, which grossed more than $2 billion this year. Even then, the sales were almost exclusively from mainland China. In North America, it earned only $20.9 million.
The Motion Picture Association did not immediately reply to messages left Sunday evening.
Data from the MPA shows just how Hollywood exports dominate cinemas. According to the MPA’s data, American movies generated $22.6 billion worth of exports in 2023 and $15.3 billion worth of trade surplus.
Trump has lived up to the label of “tariffman” he gave himself many years ago by imposing new taxes on products made around the world. This includes a 145% tax on Chinese products and a baseline of 10% on other countries’ goods, with higher tariffs being threatened.
Trump’s unilateral tariff imposition has had a profound impact on the flow of commerce. He has created political risks and pushed the market in a different direction. Tariffs are in place on steel, aluminum, and autos. More imports, including pharmaceuticals, will be subject to tariffs over the coming weeks.
Trump has expressed concern over the production of movies moving abroad for many years.
He announced shortly before taking office that Mel Gibson, Jon Voight, and Sylvester Stallone would serve as his “special ambassadors” in Hollywood, to “bring it back–bigger, better, and stronger than ever before!”
The recent wildfires and Hollywood guild strike of 2023 have slowed down U.S. television and film production. According to ProdPro’s production tracking data, the overall production in the U.S. fell 26% from 2021.
According to The Hollywood Reporter, the group’s annual survey, which asked executives about their preferred filming locations and asked them where they would like to shoot, no U.S. location made the top five. Toronto, Vancouver, Central Europe, Australia, and the U.K. were at the top of the list, followed by California, Georgia, New Jersey, and New York.
California is particularly affected. FilmLA reports that production in the greater Los Angeles region was down 5.6% compared to 2023, and second only to the peak year of 2020 during the pandemic. Last October, Gov. Gavin Newsom proposed increasing California’s Film & Television Tax Credit Program from $330 million to $750 million annually.
Atlanta, New York City, Chicago, and San Francisco are also cities in the United States that have used aggressive tax incentives for film and television productions. These programs may take the form of cash grants, as Texas does, or tax credits, like Georgia and New Mexico.
Trump, who had just returned from a long weekend in Florida, told reporters that other nations were stealing American movie-making abilities. “If they don’t want to make a film in the United States, we should have tariffs on movies coming in.”
