US president Donald Trump is set to meet with senior figures from Hollywood after threatening in a social media post to impose 100% tariffs on films made overseas.
Trump said the decision to target the cinema industry was prompted by foreign government tax relief schemes – including those of US trading partners such as Australia, Canada and the UK – to incentivise studios to film in their country.
Speaking to reporters Trump said that “other nations have been stealing the movies, the movie-making capabilities of the US”.
“We’re making very few movies now, Hollywood is being destroyed”, he added.
LA losses
There’s been an increasing shift away from producing within the US’ movie-making district of Los Angeles, as well as the nation more widely.
Reuters cites research firm ProdPro, which found that in 2023 more than half of spending on big-budget (US$40m+) US film and television production went outside the US.
However, experts have suggested that the tariff wouldn’t reshore production but is likely to stymie it. The Hollywood Reporter’s Scott Roxborough warned:
“I think the most likely consequence is not that more productions will be done outside of America, or more productions would be done in America, but probably that just fewer productions will (be made)”.
Film industry warnings
Experts from within the industry have said that the move would not only jeopardise jobs and economic growth in an industry just recovering from the Covid-19 pandemic, but that it would also be difficult to implement practically in an age of film-consumption via media platform.
Screen Producers Australia’s chief executive, Matthew Deaner, said that a 100% tariff would send “shockwaves” through the global film industry. The Australian film sector was worth an estimated US$2.58bn in 2022, with a number of blockbuster franchises including the Marvel and Matrix series shot there.
Reuters reported that Australian home affairs minister, Tony Burke, said that “nobody should be under any doubt” that the government would be “standing up unequivocally for the rights of the Australian screen industry”.
He was echoed by New Zealand’s prime minister, Christopher Luxon, who said his government will be “a great advocate, a great champion” of the sector. Peter Jackson’s Lord of the Rings trilogy, produced by New Line Cinema, was famously shot in New Zealand.
Practical questions
Beyond damage to national sectors, others have questioned how the tariffs would be enforced in an age of global media streaming. Speaking to the FT, former ITV chair Peter Bazalgatte asked:
“In what sense can you put a tariff on a Netflix show made in the UK and distributed worldwide over the internet?”.
This wouldn’t be the first time that US zeal for border tariffs overtook practical planning, with the abolition of the $800 de minimis loophole for low-value parcels entering the US paused earlier this year to allow border forces time to prepare.
UK sector
The new tariffs would also hit the UK, which has benefitted from encouraging international productions to film on British soil.
Since 2007, when the previous Labour government introduced a tax scheme to incentivise UK film production, £5.9bn has been handed to film studios worldwide. The tax relief offers studios reimbursements of up to 25.5% of production costs as long as a minimum of 10% of this cost was incurred in the UK.
According to a 2021 report by the British Film Institute, between 2017 and 2019 alone that the relief contributed £13.5bn to the UK economy, creating jobs not only in the film industry but also supporting local business and infrastructure.
Media analyst Claire Enders told the FT that a 100% tariff on films would be “beyond devastating” for global production sites like the UK, disrupting a long-standing partnership:
“We have been making movies in tandem with the US for 100 years”.
The tariff news will also come as a blow to the UK government’s plans to make creative industries, including film, a core part of UK growth.
As of October 2024, the UK’s film sector is estimated to be worth £1.36bn and employs over 195,000 people.
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