[Text/Observer Network Qi Qian] US President Donald Trump has set his sights on the film industry again, planning to impose a 100% tariff on all films produced overseas. For the American Hollywood film industry, this news is no different from a bolt out of the blue.
To date, the Trump administration has not yet announced specific details about the tariff policy. Hollywood insiders held emergency meetings overnight in an attempt to understand how the policy will be implemented and what the specific tax standards are. Some questioned that before issuing the policy, Trump needs to clarify how he defines "American films".
According to reports by Reuters, Bloomberg and others on May 4th, in recent years, many major Hollywood productions have begun filming and producing overseas to cut costs. The main overseas shooting locations for Hollywood - the UK, Australia, New Zealand - have responded accordingly.
US media cited analysts as saying that the Hollywood film industry has not fully recovered from the pandemic and wildfires. This move would be another blow to an already severely weakened industry. A scholar from Hong Kong, China, said that the US imports very few foreign films, so Trump's move targets more at American films themselves. Other US analysts reminded that if other countries retaliate, "this will strangle our film industry, and we will lose more than we gain."
Hollywood in shock, executives hold emergency meetings
On local time April 4th, US President Trump posted a message on the social platform "Truth Social", stating that he authorized the US Department of Commerce and the US Trade Representative to immediately initiate procedures to impose a 100% tariff on all films entering the United States that are made abroad.
Trump claimed that the US film industry was "rapidly dying", and that other countries were offering various incentives to attract filmmakers and studios away from the US. "Hollywood and many other areas of America are suffering heavy blows. This is an action jointly planned by other countries, constituting a threat to national security," he wrote. "We want movies to be made again in the US!"
Screenshot of Trump's post
This news caused a huge shock in Hollywood, but then the industry felt confusion. Neither Lutnik nor Trump provided any details about how the tariffs will be implemented. Deadline reported that the sudden announcement of significant news with unclear details reflects the style of the Trump administration. Now, film companies are scrambling to figure out exactly what Trump wants.
Bloomberg and Reuters mentioned that it is still unclear whether these tariffs will target streaming films or those shown in theaters, or both. It remains unclear whether the tariffs will be calculated based on production costs or box office revenue, whether they will apply to films that have been shot but not yet released, or only to newly produced films.
After Trump posted the message, Hollywood executives held emergency meetings overnight to try to understand the details. One executive told Deadline: "Trump always wants to make deals and win victories. We must respond correctly in a timely manner. We hope this situation will pass and become impossible to implement."
The Motion Picture Association of America, which represents major film companies, has not yet commented. California Governor Newsom, where Hollywood is located, has not yet commented on this incident. Previously, Newsom had introduced tax exemption policies to boost California's film industry. Newsom's senior communications advisor Bob Saladi said: "We believe that under the International Emergency Economic Powers Act, Trump has no authority to impose taxes."
"Trump needs to first answer how he defines 'American films'"
According to Bloomberg reports, before posting the above message, Trump met with actor Jon Voight and his agent over the weekend.
In January this year, he appointed Sylvester Stallone, Jon Voight, and Mel Gibson as so-called "Hollywood ambassadors" to lead Hollywood "to be bigger, better, and stronger than ever before."
Trump's appointed "Hollywood ambassadors", from left to right: Mel Gibson, Sylvester Stallone, and Jon Voight
Deadline stated that it is certain that if Trump's movie tariff policy is true, it will be another blow to an already severely weakened industry. Until recently, Hollywood had just recovered from the severe recession caused by the pandemic. Coupled with strikes, wildfires, and high costs, the production of films in Los Angeles and its surrounding areas has plummeted by double digits in the past six years.
Meanwhile, film and television production has been leaving Hollywood for years, moving to places that offer tax incentives and lower production costs, including Australia, New Zealand, Canada, and the UK. It is reported that all major media companies in the US, including Walt Disney, Netflix, and Universal Pictures, have expanded their film and television production businesses overseas.
Los Angeles suffered heavy losses due to wildfires spreading in January this year. Visual China
For example, most of "Avatar" was filmed in New Zealand, and "Avengers: Endgame" was filmed in Scotland and the UK. Upcoming American blockbusters filmed overseas include "Fantastic Four" filmed in the UK and Spain, Universal Pictures' "Jurassic World" filmed in Thailand, the UK, Malta, and the US, and "Avengers: Part Five" filmed in the UK, among others.
Reuters cited data showing that in 2023, about half of the spending on films and TV projects with budgets exceeding $40 million by US producers flowed overseas. Over the past decade, the volume of film and television production in Los Angeles, the home of Hollywood, has dropped by nearly 40%.
Timothy Richards, founder of European cinema chain Vue, questioned how Trump defines "American films." He asked BBC in an interview: "Is it based on funding sources? Or scripts, directors, actors, and filming locations?"
To date, the main overseas filming locations for Hollywood, such as the UK, Australia, and New Zealand, have all responded accordingly.
Australian Home Affairs Minister Tony Burke said: "There is no doubt that we will firmly defend the rights of the Australian film industry." New Zealand Prime Minister Christopher Lukeson said they were waiting for more details about the proposed tariffs. "But obviously, we will be great advocates and defenders of this field and this industry." The British media union Bectu called on the government to take countermeasures.
Industry players warn: US film industry will suffer losses
Irene Gardner, president of Spada, the New Zealand Film Producers Association, said that Trump's latest statement is somewhat confusing.
Gardner said: "He seems worried about American films being shot and post-produced in other countries, but then he talks about foreign-made films being affected by tariffs. So does he mean that New Zealand-made films cannot be screened in the US without paying a 100% tariff? Or does he mean that American-made films shot here (or elsewhere) will be targeted?"
"In any case, this is a terrible disgrace," Gardner told Bloomberg. "We like American films being made here, which benefits the economy and the film industry."
Kathryn Arnold, a US entertainment consultant, told Time magazine that it is unclear how the movie tariff policy will operate and who the targets will be. She pointed out: "I know that understanding how films are made is not the responsibility of the US government or the president. But if you understand the complexity and interconnectedness of the global film market in terms of production and distribution, you will find that this policy is devastating and meaningless."
Professor Wu Guokun from Hong Kong Baptist University's School of Film Studies analyzed that the US imports very few foreign films, and this tariff is more aimed at American films shot and produced overseas.
Wu Guokun told the South China Morning Post that in the past decade or so, many Hollywood films have been shot overseas. In the increasingly globalized industry, post-production has been outsourced. He further pointed out: "This is the same as what Trump has always said about bringing factories back to the domestic market. He believes that other places are taking away job opportunities for locals, so he is taxing products produced overseas."
Time magazine reported that other countries may also retaliate against Trump's movie tariffs by taxing imported US films.
The film industry is one of the strongest export sectors of the US service industry. According to the latest report from the Motion Picture Association of America, since 2023, American films have brought trade surpluses to the US in all major markets around the world. The Associated Press also cited data showing that in 2023, US film exports reached $22.6 billion, with a trade surplus of $15.3 billion.
Fung Tsz-hsing, chairman of the Hong Kong Film Producers Association, believes that Trump's movie tariffs will not have much impact on Hong Kong's film industry, but added that more details are needed to understand how Trump's tariff policy will be implemented.
"The US is lifting a rock only to drop it on its own foot," Fung pointed out. "American films account for more than 70% of the movie market share in most countries around the world. If other countries retaliate with retaliatory tariffs, they will suffer heavily." He mentioned that compared to this, the US market accounts for less than 3% of Hong Kong's global box office. "This will have almost no impact on Hong Kong's film industry."
William Reinsch, former senior US commerce official and senior fellow at the Center for Strategic and International Studies, said that if other countries retaliate, Hollywood films will face devastating consequences. He pointed out: "This will strangle our film industry. We will lose more than we gain."
Eric Dagens, film critic for US NPR, also warned that Trump's move could further damage the US film industry. He told the BBC that other countries might tax American films, making it "harder for these films to profit overseas." He added: "For the US, this could result in more harm than good."
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