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President Donald Trump has expanded his trade war to the film industry. In an evening post on his social media platform, Truth Social, Trump announced that he had directed the Commerce Department and the U.S. Trade Representative to impose a 100% tariff on foreign-produced films imported into the United States.
“The Movie Industry in America is DYING a very fast death. Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States,” Trump wrote in his post. “Therefore, I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN!”
It’s unclear how such a tariff would be implemented, as films are considered intellectual property rather than physical goods, and are typically treated as services—which are not usually subject to tariffs. However, the U.S. Trade Representative notes that certain services can face non-tariff trade barriers, such as regulatory hurdles or tax incentives, which could put American filmmakers at a disadvantage.
Many international cities have lured film and television productions away from Hollywood by offering generous tax incentives. This trend has driven a significant number of projects to relocate to places like Toronto and Dublin. In response, California Governor Gavin Newsom has proposed a substantial tax credit aimed at bringing film production back to Hollywood.
“Hollywood, and many other areas within the U.S.A., are being devastated,” Trump wrote. “This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda!”
Although Hollywood remains resilient, the U.S. film industry is grappling with a shifting landscape. Movie ticket sales have declined as the number of major theatrical releases has dropped since the pandemic, while audiences increasingly turn to streaming services for home viewing.
In 2018, the U.S. box office grossed nearly $12 billion, but that figure plummeted to just over $2 billion in 2020 when theatres shuttered due to COVID-19. While theatres have since reopened, the number of film releases is still only about half of what it was in 2019, and domestic box office revenue has yet to surpass $9 billion annually since the pandemic.
Most major streaming platforms are backed by Hollywood studios, yet few have turned a profit. Netflix is a notable exception. Disney+ and Max — the latter of which shares ownership with CNN — recently posted their first profits, but many other services remain in the red.
Imposing tariffs or trade barriers on foreign-made films may not benefit Hollywood financially. Many U.S. movies and series are shot overseas, drawn by generous tax incentives and lower labour costs. Such international productions help studios keep expenses down.
While former President Trump has long criticised non-tariff trade barriers imposed by other countries, his retaliatory measures have mostly consisted of traditional tariffs on goods. He has enacted a general 10% tariff on most imports, along with targeted tariffs — including 25% on steel, aluminium, autos, and auto parts, and a sweeping 145% tariff on certain Canadian imports.
However, none of those tariffs have applied to services. If enacted, tariffs on film production could mark the first U.S. trade barrier of its kind targeting a service industry.
