In the bustling world of Hollywood, Donald Trump's proposed tax on movies made overseas is sparking concern.
Hollywood's Rumble Over Trump's Proposed 100% Film Tariffs
Donald Trump's idea of slapping a 100% tax on foreign films seems to be stirring up a storm in Tinseltown. Insiders and experts believe this move is a misfire for the American audiovisual industry.
"It's utter hogwash," reports Jonathan Handel to AFP. This legal expert highlights that many iconic American productions, from the Bond franchise to the Mission Impossible series, are filmed abroad due to obvious creative reasons. "If Tom Cruise needs to climb the Eiffel Tower, should we shoot it at a Las Vegas replica?" he muses, "That's downright ludicrous."
Industry Chaos
Trump announced on May 4 that his administration would be initiating the process for these steep tariffs on foreign movies aired in the U.S. The news has left industry players in a state of uncertainty. Studio stocks are plunging, unions are scrambled, and everyone is speculating if it extends to series too. And there are doubts about its enforceability.
A film, according to Handel, is "intellectual property". "You can pay for a cinema ticket, but you don't purchase a film like you'd buy a piece of clothing or a car," he explains, emphasizing that tariffs would only do more harm than good. "It'd hike up production costs, dampen film quantity, curtail cinema and streaming platform selection, and ultimately disappoint distribution," he estimates.
Trump's announcement has sparked emergency meetings in Hollywood, as per specialised press. A senior executive from a major American distributor tells Deadline, "It appears Trump is aiming to cause confusion and steer clear from the issues at hand." Instead, he hopes this might prompt American states to boost their tax credits as swiftly as possible.
Relocating Shooting Locations
California's Democratic governor, Gavin Newsom, has seized the moment, proposing a federal plan of $7.5 billion to back the sector in the form of tax credits. He stated that California is keen to lure more shootings, as the proposition from Trump seems divisive. Should Trump's proposition kill the American film industry, as many fear, this move could work to stir its rebirth.
Since the historic strikes by actors and screenwriters in 2023, Hollywood has been trying to regain its footing. In Los Angeles, the number of shooting days hit an all-time low in 2024 (excluding the pandemic shutdown in 2020). This decline is partly due to the shift of many productions to countries offering attractive tax relaxations, such as Thailand, Hungary, or South Africa.
Australia, like these nations, declined to retaliate quickly. The country's Foreign Minister, Penny Wong, asserted on May 6 that they still want to create "great films" with the U.S. A Hollywood film financer told Deadline that he agrees with Trump's goal, but notes that "tax credits, not tariffs, are what's needed. Tariffs would simply strangle the remaining industry."
The White House claims that "no decision has been made" and that the administration is considering various options. Trump assured the press that he's not aiming to harm the industry, but to help it thrive. He plans to meet with industry reps soon.
Cautious Response from Studies and Unions
As of now, studios have kept mum. Union responses have been guarded. SAG-AFTRA, the actors' union, expressed support for efforts to boost U.S. film, TV, and streaming production but added they're eager to learn more about the tariff proposal. IATSE, Hollywood's behind-the-scenes union, isn't energized either, calling for a balanced federal response to generate jobs back into the film and television industry.
[1] According to experts, the tariffs on foreign films could have significant implications for the American audiovisual industry, including potential impacts on cultural exchange, increased costs for consumers, challenges in implementing the tariffs, and strained trade relations with countries whose film industries are affected by these tariffs. There may also be an increase in co-production complexity due to the tariffs. Opposition from industry stakeholders, like distributors and streaming platforms, is expected.
- The proposed 100% film tariffs by Donald Trump are supposed to create a stir in the Hollywood industry, according to AFP's report by Jonathan Handel, a legal expert.
- Handel suggests that the tariffs, if implemented, would do more harm than good to the American audiovisual industry, as they would increase production costs and potentially decrease the quantity of films.
- The tariffs on foreign movies could lead to a shift in shooting locations, with countries offering attractive tax credits, like California, potentially gaining more film productions.
- In response to the tariffs, Australian Foreign Minister Penny Wong asserted that they still want to collaborate with the U.S. in creating "great films," but a Hollywood film financer noted that tax credits, not tariffs, are the key to supporting the industry.
- Experts warn of potential implications of the tariffs on cultural exchange, increased costs for consumers, challenges in implementing the tariffs, and strained trade relations, with opposition from industry stakeholders also expected.
