Donald Trump vows to meet Hollywood on tariff plan that shook industry

Business Standard

06-05-2025

Film and entertainment figures struggled to interpret Trump's directive, which said the American movie industry is 'DYING' and cast foreign films as a national security threat
Bloomberg
President Donald Trump said he would meet with Hollywood executives after confounding the US film industry over his plan to impose a 100 per cent tariff on movies made overseas.
'So we're going to meet with the industry,' Trump said Monday afternoon. 'I want to make sure they're happy with it, because we're all about jobs.'
Film and entertainment figures on Monday struggled to interpret Trump's directive, posted to his social media account on Sunday evening, which said the American movie industry is 'DYING' and cast foreign films as a national security threat that spread propaganda to US audiences.
'WE WANT MOVIES MADE IN AMERICA, AGAIN!' Trump said.
Shares of Netflix Inc., Paramount Global, Warner Bros. Discovery Inc. and other media and entertainment companies slid as Wall Street and Hollywood tried to discern what aspect of filmmaking would qualify for such tariffs and why it should be targeted like other industries.
The US film and television industry produced $22.6 billion in exports and ran a $15.3 billion trade surplus, according to a 2023 Motion Picture Association report. The industry generated a positive trade balance with every major market in the world, the report said.
Trump on Sunday ordered the Commerce Department and the US Trade Representative to 'immediately' begin work on the tariff process.
'Although no final decisions on foreign film tariffs have been made, the Administration is exploring all options to deliver on President Trump's directive to safeguard our country's national and economic security while Making Hollywood Great Again,' White House spokesman Kush Desai said Monday.
The statement provided no specifics about how the import taxes would be crafted and implemented, or under what legal authority they would fall — should Trump decide to move forward.
The president's assertion that foreign movies threaten national security suggests the administration may rely on Section 232 of the Trade Expansion Act, which gives the Commerce Department 270 days to investigate alleged dangers of certain imports. At the end of the probe, the president could impose tariffs. Trump has used the authority to slap duties on autos and metals.
Tariffing films, should Trump chose to do so, would prove complicated.
Many films from Hollywood studios involve global production, including shooting locations in foreign countries and post-production work that can be done anywhere in the world. Other unanswered questions include whether the charge would apply to films already shot, but not yet released, or only new productions.
Stephen Follows, a writer, producer and storytelling consultant, said that Trump 'lit a fire under an issue the industry has rarely confronted head-on. What does it actually mean for a movie to be made in America?'
Overseas Productions
Many big-budget Hollywood films in the past have been partially or largely filmed outside the US, lured by tax incentives as well as lower cost of labor for everything from actors and crew to post-production work. One of the biggest grossing US movies, 2009's Avatar, was primarily shot in New Zealand while Avengers: Endgame made extensive use of international locations, including Scotland and the UK.
Film production has become one of the most globalized industries on earth, Follows noted in a newsletter. Every aspect of the craft routinely crosses borders. 'And while Trump's proposal assumes a clear line between foreign and domestic, the modern reality of filmmaking is a blur.'
Trump seemed to seize on the incentives offered by other countries, which are causing the American film industry to die 'a very fast death,' he said in his social media post.
'Our film industry has been decimated by other countries,' Trump told reporters Monday. 'I want to help the industry. But they're given financing by other countries.'
He also blamed California Governor Gavin Newsom, a Democrat, calling him a 'grossly incompetent man' who 'just allowed it to be taken away from, you know, Hollywood.'
Hollywood Struggles
Hollywood has been gutted in recent years as film and TV work in the US has fallen 28 per cent between 2021 and 2024 according to data from the research firm ProdPro. After the pandemic, content production recovered faster in places like Canada, Australia and England, leaving Americans to bemoan so-called runaway production, or 'offshoring.'
In an effort to boost the industry, anchored in Los Angeles, actor Jon Voight and his manager Steven Paul have been pushing Trump to offer federal incentives for production. These incentives would be on top of existing state incentives and could be bought and sold.
Voight, Paul and Paul's deputy, Scott Karol, spent the weekend with Trump at the Mar-a-Lago club, where they outlined plans for such incentives while watching the Kentucky Derby. Trump posted his thoughts Sunday — but instead of offering a carrot, he held out a stick.
The US entertainment industry generates billions of dollars annually through exports of films, TV shows, and other intellectual property, said Heeyon Kim, an assistant professor of strategy at Cornell University.
In 2024, international markets accounted for more than 70 per cent of Hollywood's total box office revenue and tariffs could spark rounds of retaliation from other countries that result in 'billions in lost earnings, impacting not only major studios but also thousands of jobs in production, marketing, and distribution,' according to Kim.
This appears to be the first instance of the US government floating tariffs on services, analysts at Madison and Wall wrote in a note, but jurisdictions such as the EU have already floated doing as much in retaliation for tariffs on goods imported into the US from the EU. China has already announced it will 'moderately reduce' the number of Hollywood films allowed in the country.