Trump's Hollywood Tariff: What It Means for the US & the World

The words of the US president there. Posted on his own social media platform on the 5th May 2025.

This has repercussions. Lets dive in.

It's true that the cinema industry has been through a really rough time in recent years.

I made a whole video about the challenges Hollywood is facing right now, but in a nutshell it was impacted by the pandemic, the strikes, wildfires, changing audience attitudes and tax incentives in other territories. The film industry is very sensitive to change, it hasn’t been stable in a long time. And the tax incentives are a big reason why hollywood productions shoot overseas. If they can base some of the film in another country and provide a benefit to that countries industry and economy, then they get the perk of a generous tax relief. Also, some countries have restrictions on what films can be shown in their cinemas, and shooting in that country greatly helps a film tap into that market.

The impact on the US

This announcement from Trump is his way of proposing that if he makes it too expensive for US films to be made abroad, it will force productions to be made entirely in the US. But the flaw in this plan is that the biggest reason that films utilise the foreign tax incentives is because filmmaking is too expensive without it. Studios like Disney, Netflix, Apple, Warner Brothers: the big players, they are crafting massive productions that rely on a huge network of services and skills that costs hundreds of millions. Already the industry is losing the low and mid budget films because they are seen as risky and not commercially viable enough.

The studios find safety in existing intellectual property, so adapting games, books, toys and even other films, into new films. This requires a lot of money to purchase the rights, because it’s so likely that it’ll be successful that it’s competitive. It costs a lot to pull off the effects and create the world that matches with the existing material. It costs a lot to have skilled professionals who can make this happen convincingly. It costs a lot to market and promote the film to make sure it reaches the audience you want.

It’s likely that without the tax breaks of other countries, these costs are going to go up even further, and it means less money is saved over for low and mid budget projects, and further high budget projects. Then, with restrictions on distribution internationally, so for instance in countries like China, there are huge restrictions on foreign only made films, the US risks cutting off the second highest population in the world, 1.4 billion people, because they can’t afford to make a co-production there anymore. That cuts down how much the production makes back, ultimately making the whole process less profitable.

It’s unclear how a US made movie would be defined. This is a bigger conversation that has been happening for a long time - what defines the nationality of a product like a film?

Because a film is not just an item that is made by 1 person, or even 1 company. Film Industry Analyst Stephen Follows put together a report of how film nationality is determined around the world. If the United States were to define what makes a film “American,” it would have to choose which aspects of production and identity matter most.

Taking into consideration financial spend, ownership, key personnel, language, cultural content, treaty co-productions and registration. Follows broke down the system of determination from 18 major film-producing nations, spotlighting how different each system is. There are points based systems, certifications from governments, personnel nationality checks. There is no clear answer on how you define this.

But say we did have a definition. Many studios have moved to online platforms to share their films and shows. Does Netflix, for example, have to work with only US users money to create US shows? Does this mean that users outside of the US are not able to view what’s being made there? Are they unable to take US users money and put that toward a movie made outside the US that they know US users would love to see? Where are the lines?

The tariff proposed at the moment only applies to film, but there’s nothing to say that other media like TV and literature won’t be next. And if TV can’t be made abroad, it’s going to have an ever bigger impact. Imagine The White Lotus in Florida! A lot of TV production utilises the tax breaks and opportunities abroad. Making it cheaper to make, and also providing opportunities and growth outside of the US.

The Impact on the world

The US has been the cultural and financial leader in filmmaking since film began. As mentioned, it does draw upon perks in other countries, but it draws upon talent in other countries too. I know I’m always going on about productions coming to Scotland and bringing their own crew, and that is a problem within that strategy for growth. But it is a large part of the plans for growth. Attracting US productions to your country means the potential for some of your local crew and cast to be hired, And it advertises to other productions that this country is eligible to film in. Philippa Childs, the Head of Bectu, a media and entertainment union in the UK, said in a statement: "These tariffs, coming after Covid and the recent slowdown, could deal a knock-out blow to an industry that is only just recovering and will be really worrying news for tens of thousands of skilled freelancers who make films in the UK."

There are also lots of non-US citizens who have a base in the US, or who have moved there for filmmaking work. Where does that leave them? Because if all of this is to make movies American again, is there space for UK actors, or French Directors, or Indian effects artists?

For countries that want to sell their film to the US market, this also adds a huge cost increase, and again potentially cuts off the entire market there, if it’s too expensive to distribute there. Cannes film festival is just around the corner, and loads of filmmakers are likely days away from taking their production to the worlds biggest film sales market and finding US distribution for it.

How does it work for film festivals? That side of the industry largely relies on international submissions and the festivals themselves are richer for the variety they provide.

How does it work with awards? Are the Oscars going to have to drop Best Foreign film as a category? Are they going to have to drop their international members? To be honest the Oscars has seen a decline in popularity and credibility in recent years too, with a recent scandal where they recently made it mandatory that voters watch all the films in a category before voting. Revealing that it wasn’t mandatory already. Votes were cast even though people hadn’t seen all the entries. The exclusion of the international industry means this award has nothing to offer international filmmakers. I can see it losing cultural relevance, even further than it already has, losing sponsorship and losing any significance within the industry.

The Effect on Audiences

Already, due to the rise of so many streaming services, people have returned to piracy. Something that initially streamers seemed to combat. But with the overwhelm of so many services and the add up of all the costs involved, people have found ways to still access the entertainment they want via illegal and industry damaging means. When I was a student, and foreign films didn’t have distribution here and you’d hear of somebody who had a copy on a USB, or a dodgy looking DVD. My classmates would share around a hard drive with foreign films on them and you’d copy the ones you wanted to watch onto your laptop. It’s totally unfair to the people who created the film, it’s not the right way to access things. But when it’s so difficult to access, or so expensive to access, the opportunity to exploit arises, and people take it.

Image credit to Adam Peron on Twitter

We can be thankful that so far this is only a proposed tariff, that hasn’t come into effect yet. There are loads of questions around it and it’s not clear if productions that have already started, or have been made and are due to be distributed, will be effected. The feeling across the industry and community is that it is not the shake up that Hollywood needs.

That in fact most people believe that more co-productions abroad are more international filmmakers are the key to progress.

If you are a filmmaker and you are affected by this, then lets speak up. If this makes a negative impact on your life, then it’s not in place to benefit you, and if not the people working in the industry... who is it benefitting? And how do we change that?

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