As a motion picture trade publication, most of the stories published by Celluloid Junkie that delve into politics focus on programs to assist the industry at large. We have, for the most part, been able to avoid covering any kind of politically polarizing subjects. However, there are times when wading into a minefield of political pitfalls becomes a necessity. Usually, however, those moments don’t come on a Sunday evening.
Alas, that is precisely when the latest international trade mandate was handed down by President Donald J. Trump, a policy that will impose a 100% tariff on all films produced outside the United States, or as Trump put it, “produced on foreign lands.” In a move designed to bolster the domestic film industry, Trump made the announcement via his preferred method of lobbing a policy grenade on his social media platform Truth Social, writing:
Commerce Secretary Howard Lutnick confirmed the administration’s swift action, posting on X (formerly Twitter), “We’re on it.” Yet, as is often the case, specific details regarding the implementation of the tariffs remain unclear, including whether they will affect streaming content, television or only theatrical releases. Putting aside the fact that tariffs are generally used for physical goods, Trump’s announcement sent shockwaves through the global film industry, which immediately set about trying to understand what such a policy would mean for both Hollywood films and international productions being distributed in the US.
And here’s why… it’s no secret that for at least the last decade, (probably more like two), Hollywood productions have ventured to countries like Australia, Hungary, Ireland, New Zealand, Spain and the United Kingdom to take advantage of tax incentives. The cost of producing a film in such territories is further lowered by cheaper labor and crew members who are often non-union. Australia’s Gold Coast, dubbed “Hollywood 2.0,” has hosted major productions like “Aquaman” and “Elvis,” contributing over USD $2 billion and more than 20,000 jobs since 2015. All of the “Avatar,” “Hobbit” and “Lord of the Rings” films have been made in New Zealand.
Today, a movie can be filmed in Ireland with its visual effects created in New Zealand while its score is recorded in Romania, as it benefits from production incentives in each territory along the way, reducing its cost by upwards of 40%. Indeed, certain producers have become specialists at cobbling a movie together through co-productions that string together rebates, grants and tax incentives from multiple countries.
An Unfortunate Harbinger Ahead of Cannes
Trump’s tariff bombshell comes a week before the industry is set to gather in Cannes, France where many such deals are put together at the Marché du Film (Cannes Film Market), held during the Cannes Film Festival. The annual event is where US buyers like IFC Films, Mubi, Neon and Sony Pictures Classics (among others), which specialize in distributing foreign language titles purchase the rights to movies like “The Taste of Things,” “Anatomy of a Fall” and “I’m Still Here.” There is now uncertainty among sales agents and distributors as to what Trump’s tariff policy will mean for their projects.
And it’s not just indie, foreign language titles that could suffer. Even studio titles like Paramount’s “Mission: Impossible – The Final Reckoning” and Wes Anderson’s “The Phoenician Scheme,” which will both premiere in Cannes, were filmed in Europe. Lucasfilm is preparing to shoot “Star Wars: Starfighter” in the United Kingdom beginning later this year. Will any of these Hollywood studio films be subject to a tariff, or just those made by non-US companies?
Tim Richards, Founder and CEO of the European cinema chain Vue, questioned the feasibility of even defining what a “foreign film” is in today’s globalized production landscape. During an interview with the BBC’s “Today” program on Monday following Trump’s announcement, Richards said, “The devil will be in the details and we need to parcel through exactly what [the announcement] means. A big part of this is what constitutes US film. Is it where the money comes from, the script, the director, the talent, where it was shot?”
By midday Monday, the White House tried to alleviate some of the confusion by, if not walking back its stance, then at least clarifying it. A spokesperson for the president said, “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.”
Much like Trump’s own statement, there is some legalese being deployed here. President Trump is leveraging Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs if imports threaten national security. By declaring foreign film production a national security threat, the administration can enact tariffs without direct congressional approval. Even so, legal experts have raised questions about the president’s authority to impose such tariffs. The 1988 Berman Amendment to the International Emergency Economic Powers Act (IEEPA) prohibits the president from regulating informational materials, including films. Meaning, the proposed tariffs will certainly face significant legal hurdles.
While his approach to a solution may be ham-fisted, Trump is correct in pointing out the problem of “runaway production” in the film industry. Last month, the nonprofit group that issues film permits for the county of Los Angeles, FilmLA, published a report detailing a 22% drop in production for the first three months of 2025. That figure is down 40% over the last ten years, including a significant 26% decline since 2022. But film production hasn’t just evaporated in Los Angeles or California, it’s been slowly disappearing from the US.
Trump’s Special Ambassadors to Hollywood
The decline in film and television production in what is a high profile industry is what led Trump to make actors Mel Gibson, Sylvester Stallone and Jon Voight the so-called “special ambassadors to Hollywood.” In fact, it was reportedly after a meeting with Voight and his manager Steven Paul this weekend over how to increase domestic film production that Trump made his announcement on Sunday. Voight and Paul had been meeting with studios, production companies, guilds and trade organizations to discuss strategies to revive production. According to a statement they released on Monday, the proposal the duo presented to Trump, “includes federal tax incentives, significant changes to several tax codes, the establishment of co-production treaties with foreign countries, and infrastructure subsidies for theater owners, film and television production companies, and post-production companies… The proposal also includes a focus on job training, and tariffs in certain limited circumstances.”
Perhaps Gibson couldn’t make the meeting because he is busy prepping a sequel to his hit film “The Passion of the Christ” which, ironically, is planning to shoot in Italy this summer.
As the Trump administration tries to untangle how their proposed tariff policy would work, or even be enforced, someone may want to suggest they follow that old adage, “you attract more bees with honey than with vinegar”. Voight’s suggestion of incentives rather than penalties and costly tariffs is what would move the needle.
Marvel may be the best example of not only the problem the US faces over runaway production, but also a potential solution. Marvel filmed many of their biggest blockbusters in Atlanta, Georgia specifically to take advantage of a 30% tax credit and well-trained crews. This made production far less expensive. In other words, use a carrot, not a stick. Yet Marvel is now currently shooting “Avengers: Doomsday” as well as “Spider-Man: Brand New Day” in London, because of the United Kingdom’s 40% Business Rate Relief program introduced in April of 2024. It provides film studios shooting in England a 40% reduction in business rates through March 31, 2034. What studio wouldn’t want to save USD $40 million on a $100 million production?
Such programs, which exist in dozens of countries, are predatory to those markets, like the US, which have historically had a high level of film production. In that, the Trump administration is not wrong; other countries are luring away the manufacturing of a product (in this case, movies and television) by making the manufacturing of that product cheaper. Unlike the manufacturing of a physical product like a sneaker, car or computer, it’s not just cheaper labor that is attracting the manufacturers (i.e. studios), it is the rebates and incentives, which essentially act as subsidies to lower the cost of producing the product.
With that in mind, cue California Governor Gavin Newsom, who on Monday evening proposed working with Trump on just such a reward scheme; a USD $7.5 billion federal film tax credit modeled after the $750 million annual program the state currently offers. “America continues to be a film powerhouse, and California is all in to bring more production here,” said Newsom. “Building on our successful state program, we’re eager to partner with the Trump administration to further strengthen domestic production and Make America Film Again.”
In Washington DC, newly elected Senator Adam Schiff of California has been pitching a federal tax incentive for domestic film and television production for at least a year now. In a statement after Trump’s tariff announcement, Schiff said, “I share the administration’s desire to bring movie making back to the United States. While blanket tariffs on all films would have unintended and potentially damaging impacts, we have an opportunity to work together to pass a major federal film tax credit to re-shore American jobs in the industry. I welcome the opportunity to work with the administration and my Republican colleagues to pass a globally-competitive federal film incentive to bring back run-away production.”
Given that Schiff was the lead prosecutor during Trump’s first impeachment trial in 2019, it’s hard to see the two ever working together on anything, but his comments are accurate; tariffs for foreign made film productions will cause more harm to the US film industry than good, especially since the US is a net exporter of movies. According to the Motion Picture Association (MPA) the country exports three times as many movies than it imports, most of them from the studios the trade body represents. The European Audiovisual Observatory reports that US movies made up 69% of admissions in 2023 throughout the EU. Without a trade deficit, international governments could go after the US by placing reciprocal tariffs on Hollywood movies, raising their ticket prices abroad and causing box office to suffer.
This was the scenario undertaken by the Chinese government when they announced fewer Hollywood films would be released in the country in response to the 145% tariffs the Trump administration has levied against imports from China. News of Trump’s foreign film tariff plan has already led to at least a dozen international governments and trade bodies announcing their intention to double down on their own local film productions so as to be less reliant on American movies.
Meanwhile, admissions and box office derived from the small number foreign language titles that are released annually in the US is quite low. A USD $1 million gross for such releases is often seen as a hit. Making it more costly for audiences to see such movies would cripple the independent arthouses that rely upon them for programming.
A research note about the proposed foreign movie tariffs from the investment bank Barclay’s may have stated it best, “If this is deployed on a wide scale, it may end up harming the very industry it is supposed to help.”
