U.S. President Donald Trump has imposed a 100% tariff on films produced outside the United States, stating that the American movie industry is facing a severe decline due to international incentives that lure filmmakers abroad.
Trump made the announcement on Sunday via Truth Social, labeling foreign film production as a national security threat tied to messaging and propaganda efforts by other nations.
“This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda,” Trump declared.
Enforcement of the tariff
The tariffs will be enforced by the Department of Commerce, which has been directed to begin immediate implementation.
Trump’s administration has emphasized its objective: revitalizing domestic film production and ensuring that movies are made in America once again.
Commerce Secretary Howard Lutnick, responding to the announcement on X, stated, “We’re on it.” However, neither Trump nor Lutnick provided details on enforcement, leaving many in the entertainment industry questioning how the tariffs will be applied, whether on box office revenue, streaming services, or production costs.
Hollywood Reacts as Industry Faces Uncertainty
Film executives scrambled to assess the impact of Trump’s policy, with the Motion Picture Association, representing major studios, yet to issue an official response.
- The industry has long battled shifting global production trends, as filmmakers increasingly choose tax-incentivised locations such as Canada and Britain over the United States.
- Governments worldwide have ramped up credits and cash rebates, competing for a larger share of the $248 billion expected to be spent globally in 2025 on film and TV content.
Major media companies, including Disney, Netflix, and Universal Pictures, now routinely produce films abroad. In 2023, nearly half of all productions with budgets exceeding $40 million were filmed outside the U.S., according to research firm ProdPro.
What you should know
- Hollywood has also suffered a 40% decline in film and television production over the last decade, particularly in Los Angeles, where January wildfires deepened concerns that industry workers, camera operators, costume designers, and sound technicians may relocate rather than attempt to rebuild in affected areas.
- Trump’s move comes amid his broader trade policy shifts, which have disrupted global markets and heightened concerns over a possible U.S. recession.
- The tariff announcement follows his appointment of Hollywood veterans Jon Voight, Sylvester Stallone, and Mel Gibson in January, as part of efforts to revitalize the industry and restore American cinema to its former prominence.
A ProdPro survey of entertainment executives found that California ranks sixth among preferred filming locations, trailing Toronto, Britain, Vancouver, Central Europe, and Australia.
Industry leaders and labor unions have urged Governor Gavin Newsom to expand California’s tax incentives in response to competitive foreign markets.
With no clear implementation framework yet provided, Hollywood awaits further guidance from the Trump administration, as the entertainment sector braces for potential industry-wide shifts in response to the new tariff regulations.