Looking to boost the production of Hollywood movies in the U.S., President Trump on Sunday announced a new 100% tariff applied on films produced overseas.
But studio executives on Sunday were surprised by the announcement, saying they had no advance notice of the tariffs plan and didn’t know the details of how it would be applied.
For more than two decades, major studios have shifted movie production to cheaper countries, including Canada, U.K., Bulgaria, New Zealand, Australia and other countries that offer generous tax benefits to build their local economies, luring films away from Hollywood.
The migration of high-paying jobs has become a critical issue for Los Angeles, which has seen a dramatic loss in film production and jobs in recent years.
The industry hasn’t fully recovered from shutdowns because of the COVID-19 pandemic, labor strikes and a retrenchment by legacy entertainment companies, many of which overspent to build streaming services to compete with Netflix. January’s wildfires in the Pacific Palisades and Altadena dealt another blow.
“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,” Trump said late Sunday in a post on his Truth Social platform. “WE WANT MOVIES MADE IN AMERICA, AGAIN!”
The proposal is the latest in a series of tariffs that Trump has imposed on trading partners worldwide, causing turmoil in global markets.
Move executives reached Sunday privately wondered how a tariff would be imposed on a film, which, like a car, has components made in different countries while post-production often occurs in the U.S.
The Motion Picture Assn. wasn’t immediately available for comment.
Trump lamented how the “Movie Industry in America is DYING a very fast death.”
The president said countries that have offered “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,” Trump wrote. “This is a concerted effort by other Nations and, therefore, a National Security threat.”
In addition to the U.K., Hungary, Germany and the Czech Republic also offer lucrative incentives to filmmakers.
Production of television shows, feature films and commercials all declined in the Los Angeles area during the first three months of the year, according to the nonprofit organization FilmLA, which tracks shooting days in the region.
On-location production declined 22.4% compared with the same period a year earlier.
The call for 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. In January, Trump unveiled the initiative, calling Hollywood “a great but very troubled place.”
The president at the time said he and his ambassadors would help Hollywood spring “back — bigger, better, and stronger than ever before!”
But the envoys have kept a low profile since their appointment and many in Hollywood say they have not heard from them.
Late last month, Bloomberg News reported that Voight and his manager, Steven Paul, were preparing to present Trump with some ideas aimed at bolstering U.S. production, including offering some national incentives to help win back offshore business.
“It’s important that we compete with what’s going on around the world so there needs to be some sort of federal tax incentives,” Paul said in an interview with Bloomberg.
One producer, Randy Greenberg, wrote in a Sunday LinkedIn post that tariffs would hurt, not help Hollywood.
“Putting a tariff on Movies shot outside the US will increase the cost of shooting and the studios will lobby the Exhibitors to raise ticket prices and then the audience will skip the theatre and then … well you see where this is going,” Greenberg wrote.
