The U.S. and international film sectors are reeling after Donald Trump‘s announcement last night that he is “authorizing” the Department of Commerce and the United States Trade Representative to impose a 100% tariff on “any and all” movies produced in “foreign lands.”
In a message posted to Truth Social, Trump described foreign productions as a “national security threat” to the U.S. industry, adding that they draw filmmakers overseas but also bring “messaging and propaganda” into the country.
The threat, while seemingly embryonic and lacking in any detail, has sent shockwaves through the U.S. and international film sectors. The impact, should anything close to this come to pass, would be seismic on the global film sector.
“What a bombshell”, one leading German producer and distributor simply replied this morning.
“It’s insane,” a veteran UK producer told us. “So U.S. companies can only make U.S. films? James Cameron can’t make Avatar overseas? Who pays the tariffs? Leading independent distributors would all be out of business if it’s them.”
In what may prove to be the get-out clause for industry, the same producer noted: “You can’t impose on creatives what stories they can tell.”
Studios and streamers would also take a massive hit from any such move. “This also greatly impacts the streamers, whose model is to produce locally and exploit globally, including in the core U.S. market,” added a veteran international seller. “Would a foreign-shot production ever see the light of day in America? Would it be taken off U.S. streaming services?”
All of the leading studios make movies overseas, including many of the major tentpole franchises such as Avatar, Mission Impossible, James Bond and countless others. The MPA in America has yet to comment on behalf of the studios. In his second term, many of Hollywood’s leading players have shied away from publicly criticizing the President. Others have cozied up to him. Will this move prompt some to raise their heads above the parapet?
Sewing anxiety and confusion are usually first steps from Trump ahead of negotiation. A leading U.S. distribution exec told us: “Can’t see his target here other than confusion and distraction. Let’s hope this only encourages desperately needed increases in U.S. state tax incentives being implemented asap.”
A French distribution vet posited: “He will kill the U.S. industry quicker as this will increase the cost of U.S. films that already weren’t selling well internationally. Creating an incentive for shooting in the U.S. would have been smarter but I’m not sure he has that much intelligence.”
One film vet pointed us back to a comment made on Deadline overnight, which pours cold water on the notion that the move would strengthen the U.S. production business (more on that below): “All of you cheering this as bringing jobs to U.S. production need to understand that this is NOT the effect this is going to have. It will make low and mid level productions completely unproducable, hence destroying many jobs from producer assistants to writers to post-production. Further, it will lessen the amount of big budget content created because the studios won’t be able to make as much because the cost of production will be more.” The studios’ dollars currently go further overseas due to various lucrative tax incentives.
Screen Producers Australia posted to its website: “At this stage, it is unclear what this announcement means in practice or how it will be applied and implemented”, said SPA CEO Matthew Deaner. “There are many unknowns for our industry, but until we know more, there’s no doubt it will send shockwaves worldwide. For the Australian industry, it reinforces the need for the Government to focus immediately and swiftly on building a resilient local industry that can withstand global shocks like this.”
New Zealand producer John Barnett (The Whale Rider) told NZ outlet The Spinoff: “Not unlike everything else Trump has done, it is totally lacking in logic,” he says. “If there’s one thing we’ve learned in the first 100 days, is that what he says today isn’t necessarily what he’ll say tomorrow.”
“There’s honestly not much that has shaken our industry in this way,” Evelyne Snow, head of communications for the Quebec Alliance of Image and Sound Technicians (AQTIS), told Canadian outlet La Presse after Trump’s announcement. AQTIS reps 8,000 local production professionals and is part of IATSE. According to La Presse, the two groups are scheduled to meet on Monday in the wake of Trump’s comments.
Cannes Market
This wouldn’t be the first saber rattle from Trump that doesn’t come to pass as first mooted. But with the Cannes Film Market just around the corner, industry are suddenly on red alert and the impact is already being felt.
One leading U.S. film company who works on domestic and international productions told us: “Trump’s moves are already affecting sales in China but this would reduce the entire global market with buyers not wanting to pay minimum guarantees if there will be a tax on films in the Cannes market or on films they’ve already acquired. It affects domestic distribution deals but it also impacts equity players who have money in movies because their films will suddenly be worth less money. We won’t be able to make movies for the same budgets, actors won’t get paid the same fees and the list goes on. Simply, it would destroy the independent sector.”
“This is not great [for Cannes] at all,” said one leading U.S. packaging agent.
Another Euro seller noted: “What a bombshell on the eve of Cannes. It might not come into effect but just the possibility of such a tariff creates unnecessary uncertainty towards the U.S. market which was just starting to show positive signs of recovery after the strikes.”
A veteran international distributor echoed a common sentiment this morning: “It’s too early to say but this will definitely be the talk of Cannes”. An Italian buyer urged caution: “Let’s see the detail. This guy changes his mind every day.”
Foreign Government Reaction
Foreign governments are starting to react to the news.
As quoted in The Guardian, Australia’s home affairs minister Tony Burke said he had spoken to the head of the government body Screen Australia about the proposed tariffs. “Nobody should be under any doubt that we will be standing up unequivocally for the rights of the Australian screen industry,” he said in a statement.
New Zealand prime minister Christopher Luxon noted: “We’ll have to see the detail of what actually ultimately emerges. But we’ll be obviously a great advocate, great champion of that sector in that industry,” he said.
Caroline Dinenage, chair of UK Parliament’s influential Culture, Media and Sport Committee, said: “Last month the Culture, Media and Sport Committee warned against complacency on our status as the Hollywood of Europe. President Trump’s announcement has made that warning all too real.
“Making it more difficult to make films in the UK is not in the interests of American businesses. Their investment in facilities and talent in the UK, based on US-owned IP, is showing fantastic returns on both sides of the Atlantic. Ministers must urgently prioritise this as part of the trade negotiations currently underway.
“At the same time, the government’s forthcoming Creative Industries Sector Plan needs to meet the challenge we set down of incentivising inward investment while also growing our domestic sector so British film and high-end TV can thrive.”
As we reported, California Governor Gavin Newsom is among those set to resist the move.
Trump said last night: “The Movie Industry in America is DYING a very fast death. Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States. Hollywood, and many other areas within the U.S.A., are being devastated. This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda! Therefore, I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN!”
He later claimed to reporters: “Other nations have been stealing the … movie-making capability of the United States. I said to a couple of people, ‘What do you think?’ I have done some very strong research over the last week, and we are making very few movies now. Hollywood is being destroyed. Now you have a grossly incompetent governor that allowed that to happen, so I am not just blaming other nations, but other nations, a lot of them, have stolen our movie industry. If they are not willing to make a movie inside the United States, and we should have a tariff on movies that come in. And not only that, governments are actually giving big money. They are supporting them financially. So that is sort of a threat to our country in a sense.”
Trump has complained about trade deficits as he has imposed tariffs on other countries, but the movie industry has been a bright spot. According to the Motion Picture Association, the industry generated a positive balance of trade in every major market in the world, with exports 3.1 times that of imports. The industry produced $22.6 billion in exports, and $15.3 billion in trade surplus.
More as we have it…
Jake Kanter, Nancy Tartgalione and Ted Johnson contributed to this report.
