Hollywood shocked by Trump's tariffs on films produced abroad

Hollywood is facing uncertainty and skepticism over President Donald Trump's proposal to impose a 100% tariff on films produced abroad and distributed in the U.S. Industry professionals and experts widely criticize this idea, arguing that it is impractical for the American audiovisual sector.

Jonathan Handel, a specialized attorney, points out that many iconic films, including "James Bond" and "Mission Impossible," are shot overseas for creative reasons. "If a stunt requires Tom Cruise to climb the Eiffel Tower, what are we supposed to do? Film it on a replica in Las Vegas? It's just absurd," he remarks.

Trump's Sunday announcement of a "100% tariff" on films produced outside the U.S. and shown in American theaters has sent shockwaves through the industry. Studios are seeing their stock prices drop, and unions are struggling to understand the implications of this decision. Questions remain as to whether the tariffs would apply to TV series as well and whether such a policy is even feasible.

Handel explains that films are intellectual property, not products like cars or clothing that can be taxed in the same way. He argues that tariffs would hurt the industry by raising production costs, reducing the number of films available for theaters and streaming platforms, and ultimately harming distribution.

The announcement has led to crisis meetings in Hollywood, with some distributors seeing it as an attempt to create confusion and distract from other issues. A major distributor remarked that it could spur U.S. states to increase their tax credits for the industry, which they see as a more effective solution.

California’s Democratic Governor, Gavin Newsom, quickly responded, proposing a federal plan to invest $7.5 billion into the sector through tax credits. He expressed that California is eager to attract more film productions.

The discussion about tariffs highlights a broader issue: the decline of U.S. film production. The 2023 strikes by actors and writers, which paralyzed the industry, have left Hollywood struggling to recover. The number of shooting days in Los Angeles hit an all-time low in 2024, not counting the production freeze caused by the 2020 pandemic. A significant reason for this decline is the relocation of productions to countries offering lucrative tax incentives, such as Thailand, Hungary, and South Africa.

Australia, which also provides tax incentives, voiced its continued desire to collaborate with the U.S. on film projects, with Foreign Minister Penny Wong emphasizing the importance of "making great films together."

Despite differing opinions on Trump’s proposed remedy, many agree that U.S. film production is struggling. A U.S. film financier expressed support for Trump’s goal but stated that tax credits, not tariffs, are the solution. "Tariffs would stifle what's left of the industry," he added.

A White House spokesperson clarified that no decision has been made yet and that all options are being explored. Trump, in turn, assured that he does not seek to harm the industry but rather to support it, with plans to meet with industry representatives soon.

So far, studios have refrained from commenting, and unions are adopting a cautious approach. The SAG-AFTRA actors’ union has expressed its support for efforts to increase U.S. film and TV production but is waiting for more information. The IATSE union, which represents technical workers in Hollywood, emphasized the need for a balanced federal response to bring jobs back to the sector.