Hollywood executives scrambled Monday to interpret President Trump’s call for stiff tariffs on movies produced outside the U.S. — a bombshell proposal that would upend how movies have been made for years.
Trump on Sunday night announced that he was authorizing a 100% tariff on movies “coming into our Country that are produced in Foreign Lands.” The proposal, like many other Trump-imposed tariffs, is aimed at bringing a key industry back home.
Studios shoot many of their feature films in Canada, Britain, Bulgaria, New Zealand and Australia. Such countries offer incentives to attract high-paying jobs and get their landmarks featured on the big screen.
“The Movie Industry in America is DYING a very fast death,” Trump wrote on his Truth Social platform. “Hollywood, and many other areas within the U.S.A., are being devastated.”
Studio executives were caught off guard.
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.
“Nobody knows, and I don’t suspect we will for awhile,” said one high-level film industry executive who was not authorized to comment. “Is it on domestically funded foreign productions? Is it on foreign funded ones? Is the tariff on film revenues or film costs on those projects, or both?”
Gov. Gavin Newsom called on Trump to create a federal film tax credit program that provides at least $7.5 billion in incentives to studios that film in the U.S. The governor reached out to the White House Monday evening to encourage Trump to work with California to create a federal credit modeled after the state’s program with the goal of boosting domestic production.
Foreign production incentives have hobbled Los Angeles’ production economy, which has been ailing after COVID-19 pandemic shutdowns, labor strikes and a retrenchment by traditional entertainment companies after losing billions of dollars on streaming services to compete with Netflix. The January wildfires in Pacific Palisades and Altadena dealt another setback.
Production of TV shows, feature films and commercials fell 22% during the first three months of the year, compared with the first quarter of 2024, according to 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.
According to data from the Motion Picture Assn., the U.S. runs a $15.3-billion trade surplus with its exports of entertainment.
“This creates an incredible uncertainty in the industry,” said Nick Vyas, founding executive director of the Randall R. Kendrick Global Supply Chain Institute at USC. “This is the one industry where we have created a huge advantage.”
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.
“Studios chase cheap production costs overseas while gutting the American workforce that built the film and TV industry,“ said Teamsters General President Sean M. O’Brien and Motion Picture Division Director Lindsay Dougherty in a statement.
But a movie tariff would be complicated in practice.
Similar to Detroit’s auto industry, different phases of production often occur outside the U.S., such as adding special effects.
Tariffs are typically imposed when a product arrives at a port of entry, at which time the importer of record must pay the tax before the item is released. That wouldn’t be feasible for films, which are distributed digitally.
Digital products are also not part of the normal tariff regime, which would make it difficult to determine its valuation, said Tony Gulotta, principal and national tax practice leader at Ryan, a global business tax-focused firm.
Adding to the obstacles, the World Trade Organization also has a moratorium on taxation of digital trade that runs through March 2026, he said.
Administration officials are expected to meet with studio executives and the MPA to seek clarity about whether tariffs will be based on a film’s budget, its revenue, theater ticket prices or streaming service subscriber fees.
Another question: Would television shows, many of which are filmed in Canada and the U.K., be included?
“This is no small thing,” Frank Albarella, a media and telecommunications executive at consulting firm KPMG. “It could be really disruptive to the industry.”
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 and his manager, Steven Paul, traveled to Florida to present a plan to Trump during an in-person meeting this past weekend at Mar-a-Lago.
The plan was developed after meeting with Hollywood unions, studios and streamers, and addressed multiple potential ways to help the U.S. film business. Those included federal tax incentives, co-production treaties with other countries, infrastructure subsidies, job training and “tariffs in certain limited circumstances,” according to a statement from Paul’s production company.
“The American film industry, and Hollywood, is a beacon for teaching the American Dream to the world and is an engine for job growth and career opportunity,” Paul said in the statement.
But it was Trump himself who came up with the tariff plan, a White House official said.
Congressional leaders warned that tariffs were not the best way to boost the American film industry.
“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.
Some experts warned that imposing stiff tariffs could invite reciprocal levies from other territories.
The news could also dampen dealmaking at the Cannes Film Festival in France next week due to the uncertainty of the proposed policy.
Senior debt lenders have expressed concern about how this will affect distribution, said Peter Marshall, managing principal of media insurance services at Epic Insurance Brokers & Consultants.
“If you wanted to time a bombshell statement to frustrate the independent film sector, you would say it now, right before the largest market in the world,” Marshall said. “This will, I think, almost certainly cast a huge pall over that.”
Times staff writers Michael Wilner, Stacy Perman, Taryn Luna and Wendy Lee contributed to this report.
