How Trump's tariffs are hurting Hollywood

The Hill

20-04-2025

Among the many ripples that President Trump's tariff announcements have sent through the U.S. economy, the movie industry is emerging as an unexpected casualty. That's partly because China is responding by further reducing the quota of American movies allowed into that country.
These tariffs, aimed at reducing reliance on foreign goods, have inadvertently hit Hollywood's stateside productions, international collaborations and market access, particularly with Canada and China.
Hollywood is and long has been intertwined with the global economy. More recently, the rise of streaming platforms investing heavily in international productions is reshaping the global cinematic landscape. These developments pose significant challenges for independent production companies striving to navigate an increasingly complex environment.
Amid geopolitical tensions, streaming giants like Netflix are aggressively expanding their international production portfolios. Netflix's commitment to invest $1 billion in Mexican film and TV production over the next four years exemplifies this trend. Such investments not only diversify content offerings but also reduce dependence on traditional Hollywood productions. This strategic pivot enables streaming platforms to cater to a global audience with localized content, potentially diminishing the dominance of American-centric narratives in the global market.
Canada, often dubbed 'Hollywood North,' has long been a favored destination for U.S. film and television productions due to its attractive tax incentives and skilled workforce. However, the introduction of tariffs on Canadian goods has strained this symbiotic relationship. Industry insiders express concerns that escalating trade tensions could prompt Canada to revoke tax incentives or limit access to its production facilities. Such retaliatory measures would compel American studios to seek alternative, potentially more expensive, locales, thereby inflating production costs and disrupting established workflows.
China's burgeoning film market had become a key revenue stream for Hollywood, with American studios eager to capitalize on the expanding Chinese audience base. Historically, negotiations aimed to increase the quota of American films allowed in Chinese cinemas and to secure a larger share of box office revenues for U.S. studios. However, China's film quotas can be used as leverage in broader economic negotiations, and the booming box office for Chinese-made movies threatens to curtail Hollywood's access to the world's fastest-growing film market, affecting potential earnings and strategic market expansion plans.
Independent production companies find themselves at a crossroads amid these shifting dynamics. The combination of strained international relations and the rise of globally focused streaming content presents both challenges and opportunities. Reduced access to foreign markets and increased production costs due to tariffs could squeeze the already tight budgets of independent filmmakers. Tariffs can affect any imported good that may be used in filming, from equipment to props to costumes.
While state location incentive programs in the U.S. attempted to stem the tide of runaway production, drawing some film production from other countries, the pandemic and years of strikes hurt the domestic industry. Other countries then responded with more robust incentive programs, advanced studio infrastructure and lower costs. Canada, the United Kingdom and the state of Georgia have been especially aggressive, offering tax credits that significantly undercut California's incentives. U.S. production levels fell domestically by 35 percent in 2024, while live-action scripted projects in the U.K. and Canada remained stable or even increased. It is also expensive to film in America compared to many other countries.
The intersection of trade policies and streaming platforms' evolving strategies is reshaping the U.S. movie industry. While major studios grapple with the implications of tariffs on international collaborations and market access, independent production companies must adapt to a landscape where traditional barriers are both eroding and reforming. Success in this new era will depend on the ability to navigate geopolitical complexities, leverage emerging platforms and deliver content that resonates across cultural and national boundaries.
Stephen R. Greenwald has been involved in the motion picture industry for over 40 years as an attorney, film financier, corporate executive, producer and consultant. He is of counsel at the law firm Garson, Segal, Steinmetz, Fladgate LLP. Paula Landry is a writer, producer and film business and media consultant. She is the president of IdeaBlizzard. They are the co-authors of ' The Business of Film: A Practical Introduction.'