As an industry that makes movies and TV shows—in trade parlance: services, not products—Hollywood may have thought it was safe from President Donald Trump’s tariffs. While the stock market took major dips over the past month, streaming players like Netflix seemed like a good bet.
On Sunday, that changed. Trump took to Truth Social to announce that the US movie industry was “DYING” and that he wanted to bring it back using his favorite lever: tariffs. Specifically, a 100 percent tariff on movies coming to the US that were “produced in Foreign Lands.”
By Monday, White House spokesman Kush Desai was already pumping the brakes on the statement, telling The Hollywood Reporter “no final decisions” had been made on the tariffs. That didn’t stop the industry from spiraling. Shares in Netflix, Disney, and other media properties started to slip, but the real uncertainty laid in a much different question: How the hell do you tariff movies?
Tariffs, as Trump deploys them, are meant to make importing so financially unappealing that companies make their products in the US. Movies, however, aren’t cars or iPhones. They don’t come over on ships and get taxed at the port. Would the tariffs apply to foreign films acquired by US distributors? If a US studio makes a film but shoots a handful of scenes overseas, does that count? Would TV shows be included? Would new movies shot abroad, like the forthcoming Mission: Impossible—The Final Reckoning, find themselves getting a hefty bill if the tariffs went into effect down the line? Answers have not been forthcoming.
And while tariffs are unlikely to have the effect Trump claims he wants, a federal tax credit program for filmmakers—something California politicians spent years advocating for—could be a much stronger alternative. Though, as of this writing, it’s not one Trump has indicated he has an appetite for.
A lot of the confusion over Trump’s proposed tariff is a result of the labyrinthine ways modern movies get made. For years Hollywood studios have filmed abroad in search of tax incentives offered in places like the UK, Canada, or Australia that essentially subsidize the cost of renting local facilities and hiring local crews in exchange for bringing business to those countries. Visual effects and other aspects of postproduction can get outsourced too. Bringing that work back to the US would be good for American filmmakers and their crews, but there’s no clear indication a tariff would do that. More likely, studios would just make fewer films, or—as consumers have seen with tariffs on other goods—the price of hitting the cineplex would go up.
In a Monday LinkedIn post, cinema analyst David Hancock wrote that it’s “quite hard to see what the US government can actually tariff.” Frequently, films are digital files, and the rights to them are often split between creators, financiers, and other entities. “Either the US government has to ban US producers from working abroad, which would significantly reduce the number of movies being made and drastically weaken their film industry,” Hancock wrote, “or they have to create a federal tax credit scheme” to help US studios maintain their output without seeing their costs skyrocket.
