What impact could Trump's tariff plan have on Hollywood?

 

What impact could Trump's tariff plan have on Hollywood?

US President Donald Trump has said he will impose a 100% tariff on foreign films. Such measures have already sparked controversy around the world.

Trump said in a post on Truth Social that he is authorizing the US Commerce Department representative to initiate the levy tax process because the US film industry is “dying very quickly,” that is, heading towards decline.

So what could this mean for both the US film industry and the global film business, including the UK?

Is the Hollywood industry dying?

While announcing the new tariffs, Trump said that Hollywood is “dying.” So is this true? It is true that the industry has been going through a really difficult time in recent years.

After the coronavirus, film production and development in the Hollywood industry came to a standstill and its effects are still ongoing.

Hollywood studios spent $11.3 billion on productions in the second quarter of 2024, down 20% from the same period in 2022. Studios have continued to cut costs in an effort to recover from the coronavirus pandemic.

The 2023 actor and writer strikes dealt a major blow to efforts to recover from the losses and return to profitability.

Then, earlier this year, the wildfires hit. And now, for years, more and more people, not just young people, are turning to YouTube and other streaming platforms.

The United States has become a major hub for film production, and according to Variety, box office figures in 2025 have seen an acceleration from the previous year. Overall, domestic revenue has increased by 15.8% so far in 2024.

Marvel’s latest superhero film, “Thunderbolts,” topped the North American box office this weekend, earning an estimated $76 million. And it provided a promising start to the summer season.

But Hollywood is certainly not back to that point yet.

What’s on Trump’s mind?

Trump says he wants to “immediately implement a 100 percent tariff on all foreign-made films coming into the United States,” he says. “We want American-made films again,” he says.

That has raised questions about whether the tariffs will also apply to American film companies that make films abroad.

Several recent major films produced by American studios have been shot outside the United States, including Deadpool and Wolverine, Wicked and Gladiator 2. Hit franchises like “Mission: Impossible” also shoot abroad.

We don't yet know whether the tariffs will apply to such American companies.

Trump later told reporters that "other nations are stealing films and filmmaking talent from the United States," suggesting he was referring only to non-American films. "But we'll have to wait for more details."

What incentives do other countries offer to the film indus

Many countries like New Zealand, Australia and the UK offer tax breaks to encourage film production and this is something that Trump wants to take.

But this is not the only reason why an American film company wants to make a film abroad.

These companies do so for certain locations and interesting scenes abroad. Who can forget the scene of Tom Cruise climbing the Burj Khalifa in Mission: Impossible - Ghost Protocol?

What impact could Trump's move have on the upcoming James Bond film? A franchise now owned by US company Amazon but based on a famous British character who works for London-based Mi Six?

And it’s not just other countries offering incentives to their film industries, but also other US states that are becoming a way to distance themselves from Hollywood.

Georgia, Illinois and Kentucky are among several other US states that California is now competing with.

California Governor Gavin Newsom, who Trump on Monday called “totally incompetent” when talking about film tariffs, is currently pushing his plan to more than double the state’s film and TV tax incentives to $750 million a year.

While Gavin Newsom has yet to comment on Trump’s proposal, his senior communications adviser told Deadline that “we believe he has no authority to impose tariffs under the International Economic Emergency Powers Act.”

How will such tariffs be implemented?

At the moment, there are more questions than answers on the issue of tariffs.

The World Trade Organization (WTO) has banned tariffs on digital goods until 2026. Films are likely to be considered digital goods.

And on what basis will they impose tariffs? On box office receipts or the production costs of films? Does that include online streaming content? This will have a huge impact on US companies like Netflix. What about post-production, or editing?

Tim Richards, CEO and founder of Wave Entertainment, told BBC Radio 4’s Today programme that “a big part of it is what makes an American film. Is it about where the money comes from, the script, the director, the talent, and where the film is shot?”

And how do you classify a foreign film when there are so many co-productions and often shot in multiple countries?

Trump appears to be talking about film rather than TV, but it’s not 100% clear at this stage. Will the tariffs apply to films made for streaming or just theatrical release? We’ll have to wait for more details. And of course, Trump could backtrack on the proposals, as he has done with some other tariffs.

What does this mean for other countries?

Obviously, imposing a 100% tariff on these foreign films means a huge increase in costs for production companies looking to sell their films in the US market.

Commenting on Trump’s announcement, Dame Caroline Dinnage MP, chairwoman of the UK government’s Culture, Media and Sport Committee, said: “Last month the Culture, Media and Sport Committee warned against our status as Europe’s Hollywood. President Trump’s announcement has made that warning a reality.

Making it harder to make films in the UK is not in the interests of US businesses. US companies have invested in the right facilities (studios, locations etc) and skilled people for filmmaking in the UK. And streaming services based on US-owned internet providers are making huge profits on both sides of the Atlantic. Ministers should now prioritise this as part of the trade talks.’

Philip Childs, head of the UK’s media and entertainment trade union Becto, said in a statement: ‘These tariffs, coming after Covid and the recent slowdown, could be a major blow to an industry that is only just recovering and will be truly distressing news for the thousands of skilled freelancers who make films in the UK.’

Christy Bell, chief executive of production company Goldfinch, questioned how the tariffs would work, pointing out that blockbuster films such as Barbie, which was distributed by US studio Warner Bros. Pictures, were ‘originally shot entirely in the UK.’

‘If these US films were not produced or partly produced in the UK, freelancers would be out of a job,’ she told the PA. I’m telling you now that they are really going to be unemployed.’

The governments of Australia and New Zealand have also spoken out in support of their countries’ film industries. Australian Home Affairs Minister Tony Burke said: “No one should be in any doubt that we will stand up clearly for the rights of the Australian screen industry.”

New Zealand Prime Minister Christopher Laxon told a news conference that his government was waiting for more details of the proposed tariffs.

“But obviously we will be a great advocate, a great champion of this sector and this industry,” he added.

With the Cannes Film Festival approaching, there is uncertainty and many American film producers are waiting to sell rights to foreign distributors.

Will these tariffs work?

Tariffs could encourage US film companies to make more films at home, but the risk is that if it is more expensive to do so abroad, some films may not get made at all.

More incentives or concessions could help address this, but we don’t know at this stage whether this is being discussed nationally.

NPR Radio film critic Eric Diggins has warned that if tariffs are introduced, it could further damage the industry.

He told the BBC that other countries could respond by imposing tariffs on US films, which would “make it harder for those films to make a profit abroad.”

He added that this could create a situation where tariffs in the US are doing more harm than good.

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