Donald Trump’s recent directive to the United States Trade Representative to combat practices of cultural protectionism has raised quite a storm within the film industry. He called for a blanket 100% tariff on movies made abroad. This step is part of his plan to restore national production and address what he’s described as a “national security threat.” Trump’s social media post intoned many of the same things he was concerned about with overseas film production, saying it includes “messaging and propaganda.”
The proposed tariff comes during a time of many converging forces that have already changed the landscape for film production. The COVID-19 pandemic accelerated that trend, forcing studios to seek alternate home addresses amid lockdowns. In 2023, the growing synchronized labor strikes made news and accomplished added fuel to that transformation. The growing global audience for streaming services has incentivized studios to look beyond traditional filming locations in the U.S.
Economic Implications of Film Production Tariffs
If put into effect as proposed, the tariff scheme could result in significantly greater production costs here in the United States. As media and technology expert Rich Greenfield of LightShed Partners has noted, the effect could be devastating. They claim that studios will pay the price, which will eventually get passed down to consumers.
“President Trump figured out the fastest way to dramatically reduce the number of films produced each year in America,” – Rich Greenfield.
On its face, the proposal raises serious questions about the longer-term viability of smaller and midsize films. As studios grapple with higher costs, they may increasingly focus on big-budget franchises, potentially sidelining independent projects that rely on more modest budgets. Global content spending has jumped almost 40% in the past seven years, currently totaling around $250 billion. This rapid market growth exemplifies a global, competitive “race-to-the-bottom” in production incentives.
Several states within the U.S. have responded by enhancing financial incentives to attract filmmakers, aiming to compete with established hubs like California and New York. This competition would make Trump’s initiative considerably more complicated. Studios are looking at tax credits from foreign productions against the growing costs of filming here.
The National Security Argument
Unfortunately, this is a relevant question. She took on the flawed notion that filming in places such as the United Kingdom could be dangerous in any way.
“If a Hollywood film is shot, say, in the United Kingdom, I don’t understand how that is a national security threat,” – Tejaswini Ganti.
Ganti further explored the realities of film production. It’s not all about where you are; money talks and a lot of other factors are really important too. She stressed that most movies are still fundamentally American in nature, no matter where they are filmed.
“It’s still an American story, just shot somewhere else,” – Tejaswini Ganti.
Then Jennifer Porst, another industry professional, pointed out several reasons that productions choose where to shoot, including financial incentives. She explained that even if tariffs were an appropriate tool for the goal of domestic revitalization, they risk undermining creativity and diversity in filmmaking as a byproduct.
Impact on Moviegoers and Industry Dynamics
Studios are allowed to pass this extra tax burden from foreign films onto consumers. If that happens, we would expect to see prices of tickets increase substantially. The uncertainty surrounding the tariff’s final structure raises concerns among both filmmakers and audiences about how this policy will ultimately reshape the industry.
“Although no final decisions on foreign film tariffs have been made, the Administration is exploring all options to deliver on President Trump’s directive to safeguard our country’s national and economic security while Making Hollywood Great Again,” – Kush Desai.
As Hollywood continues to chart a course through these choppy waters, the film economy’s future is far from clear. Studios will now be challenged to balance their bottom line with the need for creative expression. The new tariff proposals will make them weigh their choices with much more scrutiny.
