Introduction to the Crisis
When Donald Trump announced plans to impose a 100% tariff on films "produced in a foreign country", the globalized US film industry began to panic. Shares of major production companies such as Netflix and Disney immediately fell due to the assumed increase in costs if productions can no longer benefit from overseas filming.
The Impact of Tariffs
In recent decades, American films and TV series have benefited from generous tax incentives for filming in Europe, Canada, or Australia, making Hollywood locations comparatively expensive. The film and content industry has become very decentralized, with international co-productions able to exchange resources and access financing in several countries.
Reactions from the Film Industry
The American director Wes Anderson wondered how the tariffs could ever work if they are applied to intellectual property, in contrast to physical goods. "Can you keep the film in customs? It is not delivered that way," said the filmmaker at a press conference. The Oscar winner Robert de Niro said about Trump’s film sanctions: "You cannot use creativity, but apparently, you can set a tariff on it."
Concerns from International Filmmakers
Vivek Ranjan Agnihotri, an Indian actor, filmmaker, and Bollywood star, said on social media that a 100% tariff for foreign films could mean that "India’s fighting film industry collapses completely". The announcement has sparked widespread concern among international filmmakers, who fear that the tariffs could have a devastating impact on the global film industry.
The State of Hollywood
Donald Trump claimed that "the film industry in America is dying very quickly". However, while it is true that the shooting on site in Hollywood has decreased by around 34% in the past five years, the slowdown is not only due to incentives to shoot in foreign places. Hollywood has also been affected by the Covid-19 pandemic, a global economic downturn, and a strike of actors and writers in 2023.
The Importance of Co-Productions
If the budgets tighten, films may not be made without co-productions that use incentives in foreign regions, says Stephen Luby, lecturer for film at the Victorian College of the Arts in Australia. "US productions that have used tax incentives in places like Australia to make their films offshore, do this because the films are cheaper to make," he said.
The Trade Deficit
There is currently a low US trade deficit in entertainment content, which means that more is imported than exported. According to Jean Chalaby, a professor of sociology at the University of London, this balance is powered by streamers such as Netflix, which does not officially export US content like "foreign things", but rather sells internationally through their own American platform.
The Future of the Film Industry
The United States is the world’s largest film and TV exporter, even if Hollywood is exposed to more competition from content hubs such as South Korea. "If these tariffs are implemented, they will surely have far-reaching consequences for the film and TV industry," Chalaby said. "But it is unlikely to make someone wealthier."
Support for Trump’s Intention
Sections of the local film industry support Trump’s intention to bring productions back to the United States, including the union that represented actors, the Screen Actors Guild-American Federation of Television and Radio Artists. The Motion Picture Association (MPA), a US film industrial group that represents Disney, Netflix, Paramount, Universal, and Warner Bros studios, also agreed that more content should be manufactured in the USA and supports the principle of tariffs.
Criticism of Trump’s Tariffs
Others in Hollywood question Trump’s tariff logic and his commitment. "The tariff thing will not happen? This man changes his opinion 50 times," said US director Richard Linklater in Cannes at the opening of his film "Nouvelle Vague". At the same press conference, the discussion about Trump’s tariffs led Zoey Deutch, who appears in Linklater’s film, to praise Hollywood’s history and culture: "It would be nice to make more films in Los Angeles," she said almost nostalgically. "I just made a film there and it was magical."
