President Trump has imposed 100% tariffs on films “produced” outside the US, and in a social media post on Sunday he declared the issue poses a national security threat.
Trump told US trade representative Jamieson Greer that he has allowed the tax process to begin “any film that comes to our country, produced on foreign land.” “This is a coordinated effort by other countries and therefore a threat to national security,” Trump added.
The Film Association, representing Washington's largest Hollywood studio, declined to comment. Released in 2023, based primarily on government data, the association's latest economic impact report showed that the film industry has created an aggressive US trade balance for all major markets around the world.
As is often the case with Trump's declarations on social media, it was not entirely clear what he was talking about. Did he mean a film containing independent foreign language films intended to be films that perform only at arthouse cinemas and streaming services?
Do such tariffs apply only to films that have received tax incentives from foreign countries or to films with scenes shot overseas? What about the visual effects of post-production? A single superhero movie often includes more than half a dozen specialized companies scattered around the world.
Technically speaking, the majority of films displayed in American cinemas are produced in the United States. It adds written scripts, processed pre-production plans, key actor cast, footage editing and sound. However, Hollywood, like traditional manufacturing, is much cheaper, so it is increasingly turning its eyes to foreign regions in the parts of the Maumee Making process that roll the cameras.
The UK, Hungary, Australia, New Zealand, Canada and others offer tax incentives used by Disney, Warner Bros., Universal Pictures, and other major film companies, including Netflix and Amazon. International regions often have low labor costs.
As a result, thousands of middle-class film workers in the United States — camera operators, set decorators, lighting technicians, makeup artists, catering and electricians — have seen work evaporate. According to the International Alliance of Theatre Employees, mostly in California, around 18,000 full-time jobs have been eliminated over the past three years.
“We allow California to lead Detroit's commitment to the automotive industry into the entertainment industry,” union vice president Michael F. Miller Jr. told the Times last month.
Sometimes, the cost of shipping costs for props and people abroad can cost the studio more than they want to save money with tax credits. But more often, producers say the cost of working in California is prohibitive. Budgets are budgets, and these budgets continue to be tougher. Peak streaming has ended, fewer people go to cinemas, and studios no longer get dollars from DVD sales.
Gov. Gavin Newsom has pushed more than twice the funds available in the state's tax incentive program. California lawmakers also introduced bills to increase film tax credits, following pressure from members and several coalitions formed after the recent wildfires in Los Angeles and surrounding areas.
In January, Trump said in a social media post he named Mel Gibson, Sylvester Stallone and John Voight “special ambassadors.”
The actors are each avid supporter of the president, and Voight, the father of Angelina Jolie, met with a handful of unions and studio executives on a private fact-finding tour, but have yet to do anything.
Matt Stevens contributed the report.
