Wyatte Grantham-Philips, Associated Press
NEW YORK (AP) – President Donald Trump is keeping his eye on Hollywood for his next tariff, threatening to collect all films produced outside the US at a rapid rate of 100%.
Over the weekend, Trump accused other countries of “stolen the US’s filmmaking capabilities,” saying he had allowed the Commerce Department and US trade representatives to immediately begin the process of implementing this new import tax on all foreign-made films. However, no further details or dates are provided. The White House then confirmed that no final decision had been made as of Monday.
Trump later said he would meet with industry executives on the proposal, but much remains unclear as to how import taxes on complex, international productions will be implemented.
If imposed, experts warn that such tariffs will dramatically increase the costs of making movies today. That uncertainty could put filmmakers in Limbo, just like any other industry recently arrested at the intersection of today’s ongoing trade war.
However, unlike other sectors that have been targeted by tariffs recently, the film questions the impact of greater intellectual property beyond physical goods. This is what we know.
Why is Trump threatening tariffs on this sudden film?
Trump cites national security concerns. This is a justification that is similarly used to impose import taxes on certain countries and on various sectors-specific goods.
In a Sunday night post about the truthful social of his social media platform, Trump argued that the American film industry is “very kind of dying” as other countries offer “incentives of all sorts” to elicit filmmaking from America.
Trump has previously expressed concern about filmmaking moving abroad. And in recent years, US film and television production has been hampered between the Covid-19 pandemic, the 2023 Hollywood Guild strike and the recent setback from the Los Angeles area’s recent wildfires. The incentive program has seen an increasing number of productions leaving California in states like Georgia and New Mexico and countries like Canada, even where films were filmed overseas and within the United States.
However, unlike other sectors targeted by Trump’s recently imposed tariffs, the American film industry currently holds a positive US trade deficit.
In cinemas, American-made films dominate the domestic market. Data from the Motion Picture Association also shows that American films won $22.6 billion in exports and $15.3 billion in trade surplus in 2023. These films say they “created a positive balance of trade in all major markets in the world.”
Last year, the international market accounted for more than 70% of Hollywood’s total box office revenue, noting Heeyon Kim, an assistant professor of strategy at Cornell University. She warns that tariffs and potential retaliation from other countries affecting the industry could lead to billions of dollars in employment in lost revenue and thousands of jobs.
“To me, this doesn’t make sense,” she said, adding that such tariffs “may otherwise undermine the prosperous portion of the US economy.”
The International Alliance of Theatre Employees, representing behind-the-scenes entertainment workers in the US and Canada, said in a statement Monday that Trump “correctly recognized” the “urgent threat from international competition” facing the American film and television industry today. However, the union instead said it recommended that the administration implement federal production tax incentives and other provisions, and “level the playing field” while not harming the industry as a whole.
How do taxes work on foreign-made films?
Everyone is guessing that.
“Traditional tariffs apply to physical imports across borders, but filmmaking mainly involves digital services. Filming, editing and post-production work occurs electronically,” says Ancopza, a lawyer and business law instructor at Santa Clara University’s Holiday School.
Koppuzha said filmmaking is more like an applied service that can be taxed, not a tariff. However, taxes require council approval. This could be a challenge for even a Republican majority.
Making a film is also an incredibly complex and international process. It is common for both large and small films to include production in the US and other countries. For example, big-budget films such as the upcoming Mission: Impossion – The Final Reckoning have been filmed all over the world.
US studios frequently shoot overseas, as tax incentives can help with production costs. But the full blanket tariff could discourage that option or limit its options, Kim said — hurt both Hollywood movies and both the world industry that helps create them.
Stephen Schiffman, a longtime veteran and adjunct professor at Georgetown University, added: “Sometimes you need to go there, because frankly it’s too expensive to try and create it on the soundstage.”
Schiffman points to popular titles filmed outside the US, including the Warner Bros. Harry Potter series. This is “the cost of literally double the amount of making these films under this proposed tariff,” he said, almost entirely filmed in the UK.
Can film tariffs affect other intellectual property?
Overall, experts warn that the prospect of challenging foreign films will challenge unknown waters.
“There is no precedent or sense of applying tariffs to these types of creative services,” Copza said. And while the Trump administration was able to extend similar threats to other forms of intellectual property, such as music, “they will encounter the same practical hurdles.”
However, some people warn of potential retaliation if successful. Kim points out the “allocation” that had to boost domestic films, for example, by securing a portion of the theatre’s screen. Many have reduced or stopped such quotas over the years in the name of open trades, but these kinds of quotas could come back if the US places drastic tariffs on all foreign-made films.
Also, while the film’s US domination means “less alternatives” for retaliation, Schiffman points out that other forms of entertainment, such as game development, could run around the associated impacts.
Others highlight the potential consequences of hindering international collaboration.
“The distribution of creative content requires a thoughtful economic approach that recognizes how modern storytelling flows across borders,” says Frank Alvarera, leader of the US media and communications sector at KPMG. “The question hanging on every screen: Can American storytelling be better cultivated through smart, targeted incentives, or can viewers be forced to pay more for what could become a narrower, creative landscape?”
New York AP writers Jake Coyle and Jill Colvin, Armor Madni in Palm Beach, Florida, and Darlene Superyu of Washington contributed to the report.
Original release: May 5, 2025, 6:57pm EDT
