Hollywood Reacts to Trump's Movie Tariffs: Chaos, Concern, and a Glimmer of Hope

On Monday, Hollywood bigwigs hurriedly tried to decipher President Trump’s suggestion of imposing hefty tariffs on films created abroad—a shocking idea that could drastically alter movie production as we know it for decades.

On Sunday evening, Trump declared that he had approved a 100% tariff on movies "entering our country from foreign lands." This initiative, similar to other tariffs imposed by Trump, aims to encourage an important industry to relocate within the nation.

Many studios film numerous feature movies in places like Canada, Britain, Bulgaria, New Zealand, and Australia. These nations provide incentives to draw well-paid employment opportunities and showcase their iconic locations in major motion pictures.

The film industry in America is facing an extremely rapid decline," Trump posted on his Truth Social platform. "Hollywood, along with numerous other regions across the U.S.A., is experiencing significant devastation.

The studio executives were taken aback.

Many filmmakers would like to work in the U.S. but would rather see the government institute its own national tax credit. Tariffs, many argue, would hasten the film industry's demise rather than preventing it, because they would increase costs. Plus, it's unclear how a tariff on movies would actually work.

“No one has clarity on this yet, and I doubt we’ll have answers anytime soon,” stated a senior figure in the film sector who wasn’t cleared to speak officially. “Does it apply to locally financed international productions? What about internationally backed domestic projects? Are these tariffs levied on film earnings, production expenses, or perhaps both?”

Incentives for foreign productions have damaged Los Angeles’ production industry, which was already struggling due to the economic fallout from COVID-19 lockdowns, labor disputes, and cutbacks by conventional entertainment firms following significant losses in their battle against Netflix through streaming services. Additionally, the fires in January in Pacific Palisades and Altadena further impeded recovery efforts.

Creation of television series, full-length movies, and advertisements fell 22% during the first three months of the year In comparison to the first quarter of 2024, as reported by the nonprofit organization FilmLA.

Major entertainment companies declined to comment. The president's announcement sparked a frenzy of questions, including whether U.S.-based companies, such as Walt Disney Co., Warner Bros. Discovery, Amazon and Netflix, would be subject to the tariffs simply for shooting a movie outside the U.S.

Based on figures from the Motion Picture Association, the U.S. has a $15.3 billion trade surplus due to the export of entertainment content.

“This leads to significant uncertainty within the sector,” stated Nick Vyas, who founded the Randall R. Kendrick Global Supply Chain Institute at USC. “In this field, we've established a substantial edge.”

Key details must be worked out, the White House cautioned Monday. White House spokesman Kush Desai said in a statement that “no final decisions on foreign film tariffs have been made."

Some crew leaders applauded Trump's instinct to protect American jobs.

"Production studios seek lower costs abroad while cutting back on the American workforce that established the film and television sector," stated Teamsters General President Sean M. O'Brien and Motion Picture Division Director Lindsay Dougherty.

However, implementing a movie tariff would prove complex in reality.

Much like Detroit’s automotive sector, various stages of production frequently take place abroad, including the addition of special effects.

Tariffs are generally levied when goods reach a point of entry, requiring the importer to pay the duty prior to release. This approach would not work effectively for films that are distributed online.

Tony Gulotta, who serves as the principal and leads the national tax practice at Ryan, a company focused on business taxation globally, noted that digital goods do not fall under the typical tariff system. This makes it challenging to assess their value, he explained.

Moreover, the World Trade Organization has imposed a ban on taxing digital trade that will last until March 2026, as mentioned.

Government representatives are anticipated to convene with movie industry leaders and the MPA to gain clearer understanding of whether duties will be determined by a motion picture’s production cost, earnings from box office sales, cinema ticket costs, or subscription charges from online platforms.

Another query: Would television shows, numerous ones being filmed in Canada and the U.K., be part of this as well?

"It’s not an insignificant matter,” said Frank Albarella, a media and telecoms executive at consultancy firm KPMG. “This has the potential to create significant disruption within the sector.”

The call to enhance U.S. production comes after Trump tapped a trio of actors — Jon Voight, Sylvester Stallone and Mel Gibson — to be his “special ambassadors” to Hollywood.

Voight along with his manager, Steven Paul, journeyed to Florida for an in-person meeting over the weekend at Mar-a-Lago where they presented a proposal to Trump.

After consultations with Hollywood unions, studios, and streaming platforms, a strategy was devised aimed at bolstering various aspects of the American film industry. The proposal encompassed several measures such as federal tax breaks, international coproduction agreements, funding for infrastructure improvements, workforce development programs, along with selective tariffs, as stated by Paul’s production firm.

"The American film industry, particularly Hollywood, serves as a global symbol of the American Dream and acts as a catalyst for employment opportunities and professional advancement," stated Paul.

However, it was Trump himself who devised the tariff proposal, according to an official from the White House.

House leadership cautioned that imposing tariffs was not an effective strategy for bolstering the U.S. film sector.

"If President Trump is serious about maintaining a dominant U.S. film industry and keeping production jobs in the United States," said Rep. Laura Friedman (D-Glendale) , a former film producer, "I invite him to join me in fighting for a national film tax credit that levels the playing field with overseas incentives."

Runaway production is a decades-old trend, but leaders say its impact on California has reached a crisis point.

Such programs as Netflix's "Bridgerton," and movies including Universal's "Wicked" and "How to Train Your Dragon," Warner Bros. "The Conjuring: Last Rites" and "The Fantastic Four: First Steps" from Disney's Marvel were shot in the U.K.

In addition to lower labor costs, studios have moved overseas to give productions local flavor for audiences in those continents. Films often collect as much as 60% of their revenue from international audiences.

Several specialists cautioned that implementing strict tariffs might prompt retaliatory duties from various regions.

The news might also discourage deals from being made at the Cannes Film Festival in France next week because of the ambiguity surrounding the suggested policy.

Peter Marshall, the managing principal for media insurance services at Epic Insurance Brokers & Consultants, mentioned that senior debt lenders are worried about the potential impact on distributions due to these changes.

If your aim was to release an explosive announcement designed to upset the independent film industry, this would be the perfect moment—just as we approach the biggest marketplace globally," Marshall stated. "I believe this will likely overshadow everything.

Times staff writers Michael Wilner, Stacy Perman, and Wendy Lee provided contributions to this report.

This tale initially surfaced in Los Angeles Times .