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Donald Trump wants to make Hollywood great again. But leaving it to his own device, he might make it worse. The US president last weekend instructed his team to begin exploring 100% tariffs on all films produced overseas, claiming that the American film industry is “dying.” That’s the showman’s view. But the sector is certainly under pressure. Between 2021 and 2024, film and television production spending in the US fell 28%. From the 2009 Avatar to the Evil 2024, the hosts of recent major Hollywood films have been filmed at least partially outside of America. But how import duties can help is a challenge.
First of all, filmmaking is a highly globalized industry. In many cases, the funds come from a consortium of international investors. Scripting is achieved through a combination of global talent, real-world settings, and high-end computer-generated images. It’s hard to find it all in America. Certainly, Las Vegas has its own Eiffel Tower, but Netflix’s recent hit show Emily at Paris would have felt that there were far fewer filmings in Paris filmed in Nevada. There are also limits to training actors across the nation to do foreign dialects.
Determining how such tariffs apply is an enviable job for White House advisers. What are the appropriate local content requirements? Do the obligation apply to movies streamed on platforms like Netflix, Apple, Amazon and more? If so, how can you enforce it? Also, does this apply to films currently in production, such as Marvel’s latest Avengers installment, which began filming at Pinewood Studios in the UK last month? There is a risk of answering these complicated questions, and may be addressed with crudely simplified formulas such as Trump’s “mutual” tariffs.
The administration must be wary of retaliation. The US film and television sector generated a trade surplus of $15.3 billion in 2023, balancing trade across all large markets around the world. Last year, the global market accounted for more than 70% of Hollywood’s box office revenue. By taking up duties in the digital services sector, the president can open a new front in the world trade war, putting a rebirth of industry backfires.
Analysts believe film studios will freeze activities until policies become clearer. For now, the president has vowed to meet Hollywood executives before moving forward. The White House announced this week that there will be no final decisions on import operations. Trump also named his own A-team of film stars John Voight, Sylvester Stallone and Mel Gibson, and helped devise plans to bring the film production back to the US. Before jumping to tariff treatment, it can be helpful to diagnose Hollywood illnesses.
Financial incentives offered outside the US have played a role in seducing production overseas, but sometimes domestic fictionality is high. The strike in the US film industry has helped some workers get higher wages and better job protections, but it has also boosted costs. It is often cheaper to shoot overseas and hire foreign photographers and animators. Doing so will bring the juice back for our film investors as well. The UK was particularly appealing, not only due to generous tax incentives, but also because of its access to world-class facilities and talented staff.
If Trump wanted Hollywood to be more competitive, he might rate the rooms of deregulation and investment incentives for filming, facilities, and visual effects. The obligation further raises the costs of the industry and takes away the internationalism that makes television shows and films truly amazing. In the meantime, the tariff man’s US-filmed Marvel liberation ambitions may need to be put on hold.
