Overview and Background

On Sunday, U.S. President Donald Trump announced a proposal to impose a 100% tariff on films produced outside the United States. He characterized this move as a response to the perceived decline of the American film industry, which he claims is being undermined by foreign incentives that attract U.S. filmmakers. Trump described the situation as a national security threat, citing a coordinated effort by other nations to "steal" the U.S. film industry. The announcement was made via his Truth Social platform and has raised questions about the feasibility and implications of implementing such tariffs on international film productions.

The proposal comes amid a backdrop of declining film production in the U.S., particularly in California, due to various factors including the COVID-19 pandemic, labor strikes, and attractive tax incentives offered by countries like Canada and the United Kingdom. In 2023, U.S. film production was down 26% compared to 2021, according to ProdPro data.

Key Findings

• Trump's proposed tariffs are aimed at all foreign-produced films entering the U.S. market.
• The U.S. film industry reportedly generated US$22.6 billion in exports and a US$15.3 billion trade surplus in 2023.
• International responses have emerged, with UK and Australian lawmakers expressing concern over the economic impact on their film industries.
• Film production in Los Angeles has decreased by nearly 40% over the past decade, with many productions moving overseas.
• The Motion Picture Association has not yet provided a comment on Trump's announcement.

“Other nations have been stealing the movie-making capabilities from the United States,” Trump stated after the announcement.

As the situation develops, industry representatives and foreign governments are seeking clarification on how these tariffs will be implemented and what they mean for international film collaborations. The U.S. film sector relies heavily on global partnerships, and the proposed tariffs could have wide-ranging consequences for both American and foreign entities involved in film production.