US President Donald Trump announced on Sunday the introduction of 100-percent tariffs on films produced outside the country, stating that the American film industry is dying a "very fast death" due to incentives offered by other countries to lure filmmakers.
"This is a concerted effort by other countries and, therefore, a threat to national security. Among other things, it is also propaganda," Trump stated on his social media Truth Social.
Neither Donald Trump nor US Commerce Secretary Howard Lutnick provided details on how the tariffs will be applied, whether they will affect films on streaming services or will be applied only to films for theatrical release.
As Reuters writes, film and television production has been leaving Hollywood for many years, heading to places with tax incentives to reduce production costs. Governments around the world have increased credits and cash rebates to attract production and gain a larger share of the $248 billion that, according to Ampere Analysis, will be spent on content production worldwide in 2025.
All major media companies, including Walt Disney, Netflix, and Universal Pictures, shoot films abroad, for example, in Canada and the United Kingdom.
According to the research company ProdPro, in 2023, about half of the spending by American producers on film and television projects with budgets over $40 million will go outside the US.
According to the nonprofit organization FilmLA, over the past decade, the volume of film and television production in Los Angeles has decreased by almost 40%.
January wildfires have heightened concerns that producers may seek work outside Los Angeles, and operators, costume designers, sound engineers, and other backstage workers may leave the city rather than try to rebuild their neighborhoods.
A survey of company executives by ProdPro showed that California ranks sixth among the most preferred filming locations for the next two years, behind Toronto, the United Kingdom, Vancouver, Central Europe, and Australia.
Hollywood producers and unions are urging Governor Gavin Newsom to increase the state's tax incentives to better compete with other locations. In response, Trump imposed tariffs.
Former senior Commerce Department official William Reinsch believes that retaliatory measures to Trump's tariffs will be devastating. "Retaliatory measures will kill our industry. We will lose much more than we gain," he said, adding that it will be difficult to justify the need for tariffs on films from a national security or emergency standpoint.
Photo: Reuters