Recent media reports indicate a “hush” has fallen over Hollywood. Other reports, however, are not so kind, describing what is happening to the US film industry as a “crisis.” US President Donald Trump went even further in a recent post on his Truth Social platform on September 29th, saying the US movie industry is dying “a very fast death.”
But the president also announced he had a plan to save Hollywood: tariffs. To be specific, he hinted at a 100 percent tariff on “any and all movies that are made outside of the United States.”
While their ultimate effectiveness has been debated, tariffs are generally seen as a tool for revitalizing a nation’s industry. Essentially, tariffs put foreign competition at a disadvantage.
Imposing tariffs on foreign film projects could be problematic for several reasons. First, the filmmaking industry deals with services more than goods — acting, directing, special effects production, licensing, marketing, digital rights management, etc. Tariffs generally only work when they can be applied as a tax on a product that is entering the country. Even if the intent were to apply tariffs only to films made completely outside the US and viewed in the US, those films are primarily “imported” via digital streaming. Instituting a “border check” for such films would be extremely complicated.
Additionally, when the president first threatened film tariffs, he mentioned movies “coming into” the US and “produced” in foreign lands. Many of today’s domestic US films include a foreign component, such as having certain scenes shot abroad. If one scene were filmed overseas, would the entire project be considered an import?
Determining a formula for defining what constitutes a “foreign film” would certainly lead to heated debate. Even if it is limited to foreign-based studios, it could inspire them to set up shop in the US and create more competition for domestic studios.
Offering a tariff-driven solution to fix the languishing US film industry also fails to acknowledge that incentives offered by foreign countries are why so many films conceived in the US are produced overseas. Rather than seeking to bring films back to Hollywood by penalizing those made in other countries, the US could consider offering similar incentives for domestic production, as some officials have suggested. Without that element, tariffs could simply leave US film studios without an economically-viable option.
George Ellis is the Founder of Coronado Beach Productions
(https://coronadobeachproductions.com).