Trump Threatens 100% Tariff on Foreign Films: What It Means for Hollywood

President Donald Trump has his sights set on Hollywood for his upcoming ventures tariffs , threatening to levy all films produced outside the U.S. at a steep rate of 100%.

Over the weekend, Trump accused other countries of “stealing the movie-making capabilities” of the U.S. and said that he had authorized the Commerce Department and the U.S. Trade Representative to immediately begin the process of implementing this new import tax on all foreign-made films. But further specifics or dates weren’t provided. And the White House confirmed that no final decisions had been completed as of Monday.

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Trump later said that He would have meetings with leaders of industry. Regarding the proposal, many details remain vague concerning the implementation of an import tax on intricate, international productions.

Experts caution that should this tariff be implemented, it would significantly increase movie production expenses. This ambiguity might leave filmmakers in an uncertain position, similar to how various sectors have found themselves entangled in the current trade disputes.

Unlike other industries that have lately faced tariff impacts, movies extend beyond tangible products, raising significant questions about intellectual property implications. Here’s what we understand.

Why is Trump threatening such a high tax on movies?

Trump is citing national security concerns, a justification he’s similarly used to levy import duties on specific nations and various sector-focused products.

In a Sunday night post On his social media platform Truth Social, Trump asserted that the American film industry is "heading towards a rapid demise" because other nations provide various inducements to attract filmmakers away from the U.S.

Trump has previously voiced concern about movie production moving overseas. And in recent years, U.S. film and television production has been hampered between setbacks from the COVID-19 pandemic, the Hollywood guild strikes of 2023 and The fires that have recently occurred in the vicinity of Los Angeles . Incentive programs have also long-influenced where movies are shot both abroad and within the U.S. , with increased production moving from California to places such as Georgia and New Mexico – along with international locations like Canada.

However, unlike other industries affected by the tariffs imposed by Trump, the American film sector presently enjoys a trade surplus that benefits the U.S.

At movie theaters, domestically produced American films significantly overshadow their competitors within the local market. According to data provided by the Motion Picture Association, American movies earned $22.6 billion through exports and achieved a trade surplus of $15.3 billion in 2023—indicating that they "produced a favorable trade balance across all key markets globally" for the U.S.

According to Heeyon Kim, an assistant professor of strategy at Cornell University, last year, overseas markets contributed more than 70% of Hollywood’s overall box office income. She cautions that tariffs and possible counteractions from other nations affecting this sector might lead to billions of dollars in missed revenues and numerous job losses.

“To me, (this) makes just no sense,” she said, adding that such tariffs could “undermine otherwise a thriving part of the U.S. economy.”

The International Alliance of Theatrical Stage Employees, which represents behind-the-scenes entertainment workers across the U.S. and Canada, said in a statement Monday that Trump had “correctly recognized” the “urgent threat from international competition” that the American film and television industry faces today. But the union said it instead recommended the administration implement a federal production tax incentive and other provisions to “level the playing field” while not harming the industry overall.

How could a tax on foreign-made movies work?

That’s anyone’s guess.

"Conventional tariffs pertain to tangible goods entering across boundaries, whereas film production largely encompasses digital services such as filming, editing, and electronic post-production," observes Ann Koppuzha, an attorney and lecturer in business law at Santa Clara University’s Leavey School of Business.

Koppuzha stated that film production should be considered as an applied service subject to taxation rather than tariffs. However, obtaining these taxes would necessitate congressional approval, posing a potential difficulty even with a Republican majority in place.

Creating a film is equally intricate—and global. Whether they're big or small, many movies involve productions not just in the U.S., but across different nations as well. For example, high-cost films such as the forthcoming "Mission: Impossible — The Final Reckoning" often have scenes filmed internationally.

U.S. film companies often choose to produce movies overseas due to tax benefits that help reduce expenses. However, a uniform tariff might deter this practice or restrict choices, according to Kim, which could harm not only Hollywood productions but also the international sector that contributes to their creation.

“When you make these sort of blanket rules, you’re missing some of the nuance of how production works,” added Steven Schiffman, a longtime industry veteran and adjunct professor at Georgetown University. “Sometimes you just need to go to the location, because frankly it’s way too expensive just to try to create in a soundstage”

Schiffman highlights well-known films produced abroad, like Warner Bros.’ "Harry Potter" series, most of which were filmed in the UK. He noted that implementing the suggested tariffs would effectively double the production costs for these movies.

Can movie import duties affect other types of intellectual property?

In general, experts caution that imposing tariffs on foreign-produced film endeavors could navigate unexplored territory.

There is absolutely no historical example or logical reason to impose tariffs on such creative services," Koppuzha stated. Furthermore, even though the Trump administration might consider extending comparable threats to other kinds of intellectual property, such as music, "they would face identical practical obstacles.

However, success may also lead to possible reprisals. Kim mentions "quotas" implemented by certain nations aimed at supporting local cinema by guaranteeing a share of screening slots for domestically produced movies. Over time, many countries have decreased or paused enforcing these quotas under the banner of free trade. Yet, should the U.S. impose broad tariffs on all imported films, such quotas might be reinstated, he noted, which would negatively impact Hollywood films as well as any American-origin intellectual properties.

Even though U.S. supremacy in filmmaking implies "fewer alternatives" for reprisal, as Schiffman points out, other sectors such as game development might experience associated consequences in the future.

Others stress the potential consequences of hampering international collaboration overall.

Frank Albarella, who leads the U.S. media and telecommunications sector at KPMG, points out that "effective content dissemination demands economically savvy strategies that acknowledge contemporary narrative techniques transcend national boundaries." He further ponders, "Is there potential to foster American storytelling via strategic inducements? Or might such measures unintentionally lead viewers into a scenario where they end up paying higher costs for a potentially limited range of creativity?"

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