When Donald Trump announced plans to impose a 100% tariff on any film “produced in foreign lands,” a globalized US film industry began to panic.Shares in major production companies like Netflix and Disney immediately fell due to an assumed rise in costs when productions can no longer profit from cheaper overseas locations.In recent decades, American films and TV series have benefited from generous tax incentives for shooting in Europe, Canada or Australia, making Hollywood locations comparatively expensive.At the same time, the film and content industry has become highly decentralized, with international co-productions able to share resources and access funding across multiple countries.

Stars deride tariffs proposal in Cannes

While lacking detail about whether the tariffs will only apply to “movies” or also TV series, Trump’s threat to heavily tax foreign content within the massive US market was widely criticized during last week’s Cannes Film Festival.American director Wes Anderson, in Cannes to launch his new film “The Phoenician Scheme,” wondered how the tariffs could ever work when applied to intellectual property as opposed to physical goods.“Can you hold up the movie in customs? It doesn’t ship that way,” the filmmaker said at a press conference.Oscar-winning actor Robert De Niro, who accepted an honorary Palme d’Or in Cannes, said of Trump’s film sanctions: “You can’t put a price on creativity, but apparently you can put a tariff on it.”Meanwhile, Vivek Ranjan Agnihotri, an Indian actor, filmmaker and Bollywood star, said on social media that a 100% tariff on foreign movies could mean that “India’s struggling film industry will collapse entirely.”

Is Hollywood’s decline overstated?

In a post on Truth Social announcing the film tariffs, Donald Trump claimed that “the movie industry in America is dying a very fast death.”On-location filming in Hollywood has declined around 34% in the last five years, according to Film LA, a film industry publication. While many film workers have lost their jobs as a result, the slowdown isn’t only due to incentives to shoot in foreign locations. The COVID-19 pandemic, a global economic downturn and a months-long strike by actors and writers in 2023 have also caused Hollywood to grind to a halt.As budgets tighten, films might not be made without co-productions that take advantage of incentives in foreign regions, says Stephen Luby, a lecturer in film at the Victorian College of the Arts in Australia.“US productions which have taken advantage of tax incentives in places like Australia to make their films offshore, do so because the films are less expensive to make that way,” he told DW. “Perhaps they may not get made without pursuing this pathway.”While actor-director Mel Gibson is helping to advise Trump on the tariffs and ways to “make Hollywood great again,” his latest film, “The Resurrection of the Christ,” will be shot in Rome and across southern Italy. There is currently a slight US trade deficit in entertainment content, meaning more is imported than exported — $27.7 billion (€24.35 billion) versus $24.3 billion in 2023.But according to Jean Chalaby, a professor of sociology at the University of London, this balance is driven by streamers like Netflix who do not officially export US-made content like “Stranger Things,” but distribute it internationally via their own US-based platform.Meanwhile, hit series like “Adolescence” and “Squid Game” that are acquired from overseas are counted as imports, even if they are US assets that earn Netflix “hundreds of millions of dollars” in subscription fees, Chalaby noted in an article for The Conversation.“The US-based entertainment industry has never been so dominant globally,” he added, despite the trade deficit. The US also remains the world’s largest film and TV exporter, even as Hollywood faces more competition from content hubs like South Korea.“If implemented, these tariffs will certainly have far-reaching consequences for the film and TV industry,” Chalaby concluded. “But they are unlikely to make anyone more prosperous.”

Tariffs could mark a content trade war

Sections of the local film industry support Trump’s intention to bring productions back to the US, including the union representing actors, the Screen Actors Guild–American Federation of Television and Radio Artists.So too the Motion Picture Association (MPA), a US film industry group that represents studios from Disney to Netflix, Paramount, Universal and Warner Bros, agrees that more content should be made in the US and supports the principle of tariffs. MPA wants to weaken the local content quotas and tax incentives that attract productions to other countries.In February, when Trump announced his broader tariffs, he singled out protectionism in the EU film market, where US streamers are required to include at least 30% of European content in their programming within EU member states.Under the EU’s Audiovisual Media Services Directive, these states can also demand that the likes of Netflix and Disney be obliged to fund local productions — which the streaming giants have tried to avoid through legal action.Others in Hollywood question Trump’s tariffs logic, and his commitment.“The tariff thing, that’s not going to happen right? That man changes his mind 50 times,” said US director Richard Linklater in Cannes at the opening of his film “Nouvelle Vague.”At that same press conference, the discussion surrounding Trump’s tariffs led Zoey Deutch, who stars in Linklater’s film that was shot in Paris, to praise Hollywood’s history and culture: “It would be nice to make more movies in Los Angeles,” she said, almost nostalgically. “I just finished doing a movie there and it was magical.”