On May 4, U.S. President Donald Trump made a sudden announcement regarding the entertainment industry, stating he would impose a 100% tariff on all films produced outside the United States. Trump claimed that foreign incentives encourage American producers and studios to shoot films overseas, undermining Hollywood and constituting a so-called national security threat.
In his social media post, Trump declared that the American film industry was rapidly declining and described foreign films as "messaging and propaganda." He asserted that this was a coordinated effort from other countries that severely impacted Hollywood and the U.S. film industry, threatening national security.
Trump authorized Commerce Secretary Gina Raimondo and Trade Representative Jamieson Greer to take immediate action, saying, "WE WANT MOVIES MADE IN AMERICA, AGAIN!"
Vague Tariff Claims Amidst Global Productions
Both The New York Times (NYT) and The Wall Street Journal (WSJ) pointed out that Trump's tariff claims are vague. The President did not clarify whether the tariffs would apply to independent foreign films shown in U.S. theaters, films streamed online, or movies partially shot overseas by American producers benefiting from tax incentives. His post also failed to mention television shows or other film products.
Most Hollywood blockbusters shown in U.S. theaters are predominantly produced in America, including writing, casting, editing, and sound design. In recent years, rising inflation in the U.S. has prompted many studios to shift some filming to countries like the UK, Australia, New Zealand, Canada, and Hungary, which offer tax incentives. Major companies like Disney, Warner Bros., Universal, and Netflix have adopted similar production strategies.
Reports indicate that some of the most anticipated blockbusters this summer, such as Mission: Impossible – Dead Reckoning and Jurassic World Rebirth, were largely filmed outside the U.S.
Currently, a superhero film requires at least six global companies to handle animation and visual effects. If Trump's policy includes non-U.S. visual effects teams as overseas productions, virtually all Hollywood films could be subject to tariffs.
Retaliatory Tariffs Could Harm Hollywood's Overseas Revenue
Data from the Motion Picture Association shows that since last year, the total investment in major U.S. films (with budgets over US$40 million) has decreased by 26% compared to two years ago. Many Hollywood executives have complained to WSJ that Trump did not communicate with the industry about the tariff plans, and they received no prior warnings.
In 2023, the U.S. film industry recorded a trade surplus of US$15.3 billion, maintaining surpluses with all major overseas markets. Industry analysts warn that overseas box office revenue accounts for more than half of many Hollywood films' total earnings. If the Trump administration rashly imposes these overseas film tariffs and provokes retaliatory tariffs from other countries, Hollywood films may face significant challenges.
(Source: Wen Wei Po)
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