Donald Trump recently proposed a staggering 100% tariff on movies produced outside the United States, igniting concerns among investors and industry insiders in Hollywood. Studios and streamers are banking on global box office sales to make up their huge production costs. This announcement is a big step in reducing that reliance. The possible tariff has many in the community understandably concerned about what this could mean for the future of film production and global collaboration.
The proposed tariff follows Trump’s earlier implementation of a 25% tariff on imports from Canada, which has served as a favored filming location for numerous Hollywood movies and television shows. At first, though, industry insiders poo-pooed the effects of the 25% tariff, arguing that it would do little to stop Hollywood production. As the new proposal hangs in the air, anxiety is mounting over how the film industry will adapt to these proposed sea changes.
An increasing number of productions by Hollywood studios are digitally captured. This approach makes it much easier to move finished goods via digital media or data storage hardware. The uncertainty over how the proposed 100% tariff would be implemented introduces some important questions about how this could be executed. It is unclear how Trump would enforce such a tariff, and who would end up footing the bill.
In the creative community, industry experts are concerned over the long term ramifications of such duties, both for Hollywood and for U.S. diplomacy with foreign countries. China, a significant market for American films, has already restricted access to Hollywood products, which could further complicate matters if additional tariffs are introduced. Filming abroad for tax breaks has long been the norm. On top of that, the allure of shooting among picturesque natural wonders overseas cast an even longer shadow over the situation.
For years, Hollywood has been increasingly reliant on international revenue to meet the cost of production. That’s a big threat right there, but a 100% tariff would be the death knell to its recovery. Even before the recently announced Section 232 tariffs, industry was reeling from the effects of Trump’s first round of tariffs. Unfortunately, this new proposal puts in jeopardy Hollywood’s extensive long-term global engagements.