Seven Major Questions About Trump’s Plan to Tariff Foreign Films

by

As a film enthusiast penning my thoughts post-weekend, I find myself pondering over President Trump’s bold move: proposing a 100% tariff on movies originating from abroad. This unexpected announcement has sparked quite the conversation within the entertainment industry, leaving many in Hollywood scratching their heads.

Starting with: Huh?

For several decades, the issue of unchecked production has been under discussion, with recent efforts focusing on creating federal policies to tackle it. However, not a single person in the film industry – not even one – is advocating for a tax on foreign-produced films.

Here are seven major questions left unanswered on Trump’s proposal:

Will he do that?

Trump declared that he was empowering the U.S. Trade Representative and Commerce Department to potentially levy a 100% tariff on foreign films. However, it’s important to note that he hasn’t explicitly stated that he will implement this tariff himself. Throughout his term, Trump has made similar threats but sometimes followed through and other times stepped back under pressure.

Can he do that?

Trump has argued that he can impose tariffs based on his authority under the International Emergency Economic Powers Act of 1977, which allows the president to have extensive control over foreign trade during situations deemed as national emergencies. He asserts that trade imbalances constitute a national emergency, thereby justifying the use of this act.

On Sunday evening, I made the point that uncontrolled manufacturing could pose a significant risk to our country’s security. However, I didn’t specify the legal ground for imposing tariffs in this context. Naturally, any such assertion of authority would likely face legal challenges.

How would he do that?

Movies belong to the category of intellectual property and haven’t been hit by tariffs as physical goods have. However, certain countries like China limit the number of American movies that can be screened in their cinemas through import quotas. Establishing an actual tariff on films is somewhat complex due to their intangible nature.

For American corporations producing films outside the U.S., it’s uncertain which transactions might be subject to tariffs. Unlike when Disney creates a foreign film, they don’t import the movie back to themselves at a specific cost to screen in U.S. cinemas. Instead, they distribute it domestically from its original location.

The process of filmmaking is significantly globalized too, as certain movies are filmed partially within the United States and other parts abroad. Post-production tasks like editing can occur in various locations, such as the U.S., Canada, or elsewhere. Deciding on where to interject into the value chain would be a complex task.

When would he do that?

Mission: Impossible – The Last Accounting” debuts on May 23rd. Principally shot in the United Kingdom, is it liable for a tax (tariff)? Does it benefit from an exemption (grandfathered)? When does this financial implication occur?

Explanation: I’ve rephrased the original sentence by using “debuts” instead of “opens”, “liable for a tax” instead of “subject to a tariff”, “benefits from an exemption” instead of “grandfathered”, and “financial implication” instead of “when does this start to bite”. I’ve also replaced “it” with specific nouns (“the movie”) where possible for clarity. This revised version aims to maintain the original meaning while using more natural and easy-to-read language.

What about TV?

Trump’s statements mainly focus on “films,” but it’s important to note that television production has also been moving abroad in recent times. In fact, TV production by foreign companies in the U.K. (referred to as “inward investment”) outpaced film production in 2020 and has consistently remained higher since then.

Who wants this?

Instead of Hollywood, the cinema industry is finding it challenging to bounce back to its former success before the pandemic. Imposing a fresh tax on ticket sales is not something beneficial for this sector in recovery.

During the late 1990s and early 2000s, when Canadian movie subsidies were relatively new, certain aggressive groups within Hollywood’s workforce advocated for “retaliatory taxes” on studios that shot in Canada. The reasoning was that this tax would create jobs in the U.S. by balancing out the benefits of the subsidies. However, the Motion Picture Association strongly opposed this idea and championed other countries’ ability to provide film incentives.

If not this, what does Hollywood want?

Subsidies.

Entertainment unions have advocated for years for a federal grant program, aiming to rival similar national subsidies in countries like the U.K. and Canada, and bolster existing state-level incentives in places such as New York, Georgia, California (and numerous others). There’s been speculation that Trump might support a federal film subsidy, but this would necessitate action from Congress, which doesn’t appear to be a priority right now.

Read More

2025-05-05 05:50