To save what he called “dying Hollywood,” U.S. President Donald Trump has announced a 100% tariff on movies produced outside of America.
The Trump administration said that the new tariffs are meant to counter the incentives that other countries offer to lure filmmakers.
“This is a concerted effort by other Nations and, therefore, a National Security threat,” wrote Trump on social media.
Trump said he has authorized the U.S. Department of Commerce, to immediately begin imposing a 100% tariff on all films produced abroad that are then sent into the U.S.
However, the Trump administration has not provided any details on how the tariffs will be implemented.
It is unclear if the tariffs will apply to movies on streaming services as well as those shown in theatres, or if they will be calculated based on production costs or box office revenue.
Movie and TV production has been exiting Hollywood for years, heading to locations with tax incentives that make filming cheaper.
Governments around the world have increased credits and cash rebates to attract productions and capture a greater share of the $248 billion U.S. that’s spent globally each year on movies and TV shows.
All major film and television studios, such as Walt Disney Co. (DIS), Netflix (NFLX), and Paramount (PARA) film overseas in countries such as Canada and Australia.
In 2023, about half of the spending by American studios with budgets of more than $40 million U.S. went outside of the States., according to industry data.
Film and television production has fallen by nearly 40% over the past decade in Hollywood’s home city of Los Angeles, California.
The top places for film and television production currently include Canada (Toronto and Vancouver), the United Kingdom, Central Europe and Australia.
Hollywood producers and unions have been urging California Governor Gavin Newsom to boost the state’s tax incentives to better compete with other locations worldwide.
Trump’s proposed movie tariff is the latest in a series of trade conflicts initiated by the president that have roiled global financial markets and raised fears of a U.S. recession this year.