‘Would do more harm than good': what will Trump's tariffs really mean for Hollywood?

The Guardian

12-05-2025

Citizen Kane, The Godfather, Gone with the Wind, Goodfellas, Sunset Boulevard and the Jean-Claude Van Damme vehicle Bloodsport – Donald Trump's favourite movies are thoroughly American and 20th century. Foreign films? Not his thing.
At campaign rally in 2020 he reacted to the South Korean movie Parasite winning the best picture Oscar by demanding: 'What the hell was that all about? We got enough problems with South Korea with trade. On top of that they give them best movie of the year? Was it good? I don't know. Let's get Gone With the Wind. Can we get Gone With the Wind back please?'
Now the US president is bringing his brand of nativist-populism to the film industry. Last Sunday he announced a 100% tariff on movies produced outside the country, saying the US industry was dying a 'very fast death' due to the incentives that other countries offer to lure film-makers. 'WE WANT MOVIES MADE IN AMERICA, AGAIN!' he wrote on his Truth Social platform.
Not for the first time, Trump had latched on to a genuine concern: Los Angeles is currently experiencing its lowest levels of local production in decades, prompting comparisons with the manufacturing decline of Detroit. But while the Motion Picture Association of America declined to comment, industry figures interviewed by the Guardian expressed scepticism about the president's proposed solution due to its lack of detail, unclear legal basis and potential to provoke retaliation.
Ava DuVernay, the award-winning film-maker whose credits include Selma and Origin, says: 'It was thoughtless and lacked any business foundation, any knowledge of how the industry works. There are people in our industry who've stepped up to say this would do more harm than good.
'It's not about tariffs; it's about tax incentives; that's what drives our industry. Hopefully more light can be shed on that and there could be a reconsideration of this with proposals that actually get people back to work and don't take away from an industry that's already struggling.'
In January Trump appointed acting veterans Jon Voight, Sylvester Stallone and Mel Gibson to bring the industry back 'bigger, better and stronger than ever before'. On 3 May Voight and business associates Steven Paul and Scott Karol visited Trump at his Mar-a-Lago estate in Palm Beach, Florida, to discuss a carrot and stick approach to the revival of Hollywood.
Voight, the 86-year-old star of Coming Home, Deliverance and Midnight Cowboy, told the trade magazine Variety: 'Thank God the president cares about Hollywood and movies. He has a great love for Hollywood in that way. We've got to roll up our sleeves here. We can't let it go down the drain like Detroit.'
According to the entertainment news site Deadline, Voight and his associates proposed a 10 to 20% federal tax credit that would be 'stackable' on what states already offer. But a US producer who chooses to shoot in a foreign country would face a tariff equal to 120% of the value of the foreign tax incentive received, the report said.
Ben Allen, a member of the California state senate, subsequently met Voight and his two associates to discuss the plan. He says: 'There's a lot more to the proposals that came before the president this weekend than just tariffs. We might want to pursue a national tax incentive as we're also pursuing a statewide. Obviously Trump took the tariff idea and ran with it, which is not a surprise given what we know he feels about tariffs.
Allen adds: 'If this is going to be successful it's going to have to be done carefully and thoughtfully. What are the implications for the international market? This is a different kind of product. Does it mean that there's going to be some sort of tax on arthouse foreign films? Is that really what we want?
'But if it's the tentpole stuff like the big Marvel movies that could just as easily be made in the US but often times we're losing to Canada or the UK or Australia or elsewhere, maybe there's something to this idea. I don't know: this was a Truth Social post. It wasn't some thoughtful policy brief that came out delineating a plan.'
It is unclear how tariffs on the film industry would work. Trump did not say whether he envisaged applying them to streaming platforms as well as theatrical releases, or whether tariffs would be based on production costs or box office revenue. It was also not certain whether productions split between the US and other countries – such as the James Bond or Mission: Impossible films – would be exempt in some fashion.
Industry professionals argue tariffs are a blunt instrument that would hinder rather than help Hollywood compete with Australia, Britain, Canada and elsewhere. They could drive up production costs, leading to less output, more disruption for distributors and fewer choices for consumers. And reciprocal tariffs against US films overseas could have disastrous consequences.
Jeff Most, a writer, producer, director and financier whose credits include The Crow and The Courageous Heart of Irena Sendler, says: 'The idea of of providing a stick with a tariff is quite counterproductive because it unquestionably will give rise to other territories doing a similar protectionist move and will ultimately then result in penalties to the consumer who ends up paying the price to the availability of material on streaming platforms.
'This is a wonderful moment in time that attention is actually being paid to this but it needs the right attention. It needs the right programme. At the end of the day tariffs are not the way to address this problem. That will only result in less being made, giving us fewer options as consumers in terms of what we see. It would decimate the independent film market.'
Trump, who has frequently called tariffs 'the most beautiful word in the dictionary', effectively declared a trade war last month by announcing sweeping import taxes on dozens of countries. But many experts doubt the feasibility and legality of implementing a tariff on movies, which are considered intellectual property or a form of service, not physical goods that pass through ports of entry.
Most adds: 'Trump is focused on promoting his use of tariffs to address whatever inequalities he sees. But at the end of the day you're talking about a business in which there is a tremendous trade surplus for American producers because the streamers offer their services globally, as they have as theatrical distributors. It's one of the bright spots of what our economy can tout as a winning area.
'To do anything of a protectionist nature will ultimately have devastating effects if other territories around the world put up barriers. It's our produced material and distributed material, even if it is shot anywhere around the world, which generates a great tax revenue base for the US treasury; that would be impacted significantly, as we've already seen with some of the industrial tariffs that have been implemented.'
The concerns are shared by Laura Friedman, a Democrat who says she is the only current member of congress who has worked in the film industry. Her 20-year career as a film and TV producer included spells at HBO and Paramount and credits such as It Takes Two, a romantic comedy starring Kirstie Alley, Steve Guttenberg, and Mary-Kate and Ashley Olsen.
Friedman says: 'We do not want to have a trade war over screening of films. I'm also worried about a tariff making it more expensive to go to the movies. We are trying to lure people back to the box office, back to the movie theater. I got into this business because I'm a filmophile. I love going to the movies. I don't want to see that experience gone.
'As far as we know, it affects streaming services as well. Does this mean that if you watch Parasite you have to pay twice as much as you would watching a different movie? I don't understand how this is supposed to work. I don't want a policy that makes it more expensive for Americans to stream content or to go to the movies.
'That would be a policy that would be counterproductive. It would hurt the industry and it would kill jobs here. I want to work with the administration on a solution that brings production back, creates a healthy industry, increases our ability to produce content right here in America.'
The idea of transplanting cast and crew overseas dates back 75 years to William Wyler's Roman Holiday, the Hollywood Reporter noted recently. Most of this year's best picture Oscar nominees were filmed outside the US, while a ProdPro survey among studio executives about their preferred production locations for 2025 to 2026 showed that the top five choices were all elsewhere.
California also faces intensifying competition domestically. Georgia, where many Marvel superhero films are shot, has offered a tax credit since 2005. New Mexico, the setting for drug drama Breaking Bad, has been doing the same since 2002. Texas, which has offered tax breaks since 2007, wants to increase its budget allocated to such funding.
Many in Hollywood are advocating for increased tax incentives to fight back. Gavin Newsom, California's governor, has offered to work with Trump and called for doubling the state's tax credits and proposed a $7.5bn federal tax credit.
Friedman agrees that state incentive must be coupled with a national film tax credit. 'LA can't do it alone. It's not enough money to compete when other countries have their federal government putting in tax incentives. California is struggling with recovery from the tragic wildfires that we had here in Los Angeles. California needs the federal government to be a better partner with us on wildfires and also on keeping jobs local.'
But others question Trump's motives, noting that he lost California by 20 percentage points in last year's presidential election and has craved acceptance by the Hollywood elite only to find it elusive. He once said: 'I think you learn in Citizen Kane that maybe wealth isn't everything.'
Drexel Heard, a political strategist who has worked as an actor, producer and writer, says: 'If he shows his supporters that he's sticking it to California, sticking it to Gavin Newsom, sticking it to the legislature, sticking it to voters who didn't vote for him then that's all he thinks he needs to do.
'But ultimately it will only hurt a large swath of people, especially union workers that rely on that work. If I'm a studio I'm going to be like, well, how do I make cuts to that? How much AI work can I use? And then that opens up a whole new world of problems.'