Cannes: What Ever Happened to Tariffs?

Yahoo

14-05-2025

International film tariffs are just sooo last week.
Since Donald Trump announced plans, via a caps-lock post on May 4, to impose a 100 percent levy on 'foreign-made' movies, it's been all the film industry has been able to talk about. The (unprecedented) idea of a movie tariff system threatened to disrupt, maybe destroy, the global system of financing, producing and distributing films.
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Trump's tariffs might still be on the table — it's hard to know with the easily distracted POTUS — but within the industry, the discussion has already moved on.
In a letter to the president on Monday, May 12, Jon Voight and Sylvester Stallone, two of Trump's 'special ambassadors' to the entertainment industry, along with a lengthy list of industry players including the Motion Picture Association, producers' groups and top industry labor guilds, called for Washington to expand and extend tax incentives to help bring film and TV production back to the U.S..
The letter called for Trump to back three tax provisions: Two that would allow bigger and better deductions on production expenses, and one that would revive a COVID-era code allowing businesses to spread net operating losses across five years, something particularly advantageous in a hit-or-flop industry like the movie business, as it would allow producers to use profitable years to offset later losses.
The letter made no mention of tariffs.
On Tuesday, another plan emerged, courtesy of Andrea Iervolino, an Italian producer of lesser-known indie films (Modì, Three Days on the Wing of Madness). Iervolino unveiled a proposal, which he claimed had the approval of Mel Gibson, another of Trump's special ambassadors, for a U.S.–Italy co-production treaty. Details are still sketchy for the proposed agreement, but, according to Iervolino, it would set up a legislative structure to incentivize Italian producers to 'make Italian films in the USA, involving American stars and therefore investing in the U.S.,' while doing the same for U.S. producers to shoot in Italy.
Iervolino's pitch is that a U.S.-Italian deal could serve as a pilot project for American co-production treaties. The global adoption of this model, he claimed, could generate up to $10 billion annually 'in investments in the U.S.,' without citing a source for this impressive estimate. Gibson couldn't immediately be reached for comment. According to reports, Lethal Weapon actor is due to begin filming his Passion Of The Christ sequel The Resurrection Of The Christ in Italy this summer.
The U.S., it should be noted, has not signed any international film or television co-production treaty agreements.
It's unclear if either the Voight tax-break model or the Italo-American treaty proposal will ever see the light of day, or even last to the end of the week. But they indicate a shift in the debate, away from Trump's big stick approach of using levies to punish productions that should outside the U.S. — productions like Mission: Impossible — The Final Reckoning, which has its world premiere in Cannes today and whose financing plan included tasty tax breaks for global location shoots in Norway, South Africa and the U.K..— towards the carrots of incentives.
The film industry outside the U.S. welcomes the shift. Producers from Sydney to Vancouver saw tariffs of any sort as a bad idea and were already gearing up to fight them.
On May 12, a group of more than 100 film and TV bodies from around the world, including the European Film Academy, Screen Producers Australia, and France's Société des Auteurs et Compositeurs Dramatiques, united to sign an open letter appealing to governments to 'safeguard the systems that support independent film and audiovisual creation.'
'If [tariffs] were to go through, it would probably devastate our film industry,' says Stuart Nash, New Zealand's former minister for economic development, who managed $650 million in film subsidies for the country's tax incentive scheme, helping to bring productions like James Cameron's Avatar sequels and Jane Campion's Oscar-winning The Power of the Dog Down Under.
'Tariffs, coming after COVID and the recent production slowdown, could deal a knock-out blow to an industry that is only just recovering,' notes Philippa Childs, head of British media and entertainment trade union, Bectu.
Tax incentives and co-production agreements, on the other hand, are the linga franca of the international film business. Moving the Make Hollywood Great Again debate away from Trump's desire to punish films that shoot outside the U.S. and towards a new system that could stimulate investment in movies, American or international, makes global players feel they are on much safer ground.
'I do think a co-production treaty with the U.S. would be a huge benefit to the Canadian industry,' says Nicholas Tabarrok of Darius Films, a production house with offices in Los Angeles and Toronto. 'Imagine the incredible talent that it would open up if we could work with American writers, directors and cast? It would undoubtedly lead to higher box office and sales of Canadian films.'
John Morayniss, co-founder and CEO of Blink49 Studios, based in Los Angeles, says co-production treaties, originally aimed at helping producers from smaller countries collaborate to better compete against better-funded American imports, could appeal to a U.S. entertainment industry that sees a similar outside threat: High-end movie tentpoles that shot overseas, taking American production jobs with them and leaving behind empty soundstages.
'So if the U.S. is now going, we're trying to also protect ourselves from this influx of non-U.S. entertainment exports, maybe Canada can say we can help you,' Morayniss said of Canadian producers bringing their expertise in navigating international co-productions to the table.
Many international producers see the possibility of a win-win situation if America, instead of trying to punish foreign governments for, as one producer called it, 'using their taxpayers' dollars to fund American movies,' chooses instead to copy the best international tax incentive models from overseas.
'The easiest and least confrontational path would [introducing a U.S.] federal incentive program,' says Nicholas Simon of Indochina Productions, a leading production service firm in South East Asia, whose credits include HBO's The White Lotus. 'The two countries to study are Australia and the UK. Take the best of both.'
Noah Segal, co-founder and co-president of Canadian indie distribution giant Elevation Pictures, tells THR the debate needs to shift away from blaming Hollywood woes on runaway production. Segal sees digital technologies, film tax credits and other soft money available internationally as providing a financial and creative boost to Hollywood producers to go further afield to shoot projects.
'Technology has allowed us to shoot all over the world, to capture locales we used to capture on a studio (stage) in Los Angeles that looked very weird and cheesy,' he argued.
Nash agrees that there is a 'competitive advantage' to being able to shoot all over the world, to take advantage of scenery and talent not available in Studio City and North Hollywood.
'We have some competitive advantages that you just can't replicate with a soundstage,' he says. 'Our scenery is magnificent…We have extremely experienced crews and facilities like Weta Workshop, which has a world-class reputation. Films like The Lord of the Rings and The Hobbit are almost impossible to make anywhere else.'
Segal is comforted by the shift in the debate, away from talk of a foreign movie tariff and towards proposals for a federal tax credit (under the Voigt plan) in the U.S. and discussions of co-production treaties between American and similar-minded nations. He thinks even Trump could get behind such an all-carrot, no-stick model to help the U.S. entertainment industry bounce back.
'They've come up with a way of inspiring people to bring co-productions to America. And what that does is repatriate some, not all of the business and shows a lift so he (Trump) looks like a hero and maintains some jobs,' he added.
So if Americans are ready via international co-productions to share IP ownership and the risks and rewards of producing a project as an international co-production, the benefits are obvious, Segal adds.
'If they go down this road, they have to understand it's not a one-way street, it's a two-way street,' he argued.
For Daniel Bekerman, a co-producer on the Donald Trump movie The Apprentice – itself an international co-production between Canada, Denmark, Ireland – bringing American producers into official cross-border co-production partnerships would be a win-win for the global industry, including Hollywood.
He doesn't see repatriating some production and some jobs back to the U.S. as a zero-sum game.
'Even though I work in Canada, I work with many Americans. And I want to see my American friends do well. I want to see the American workforce stabilized and thrive,' Bekerman says.
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