Hollywood is shaken by Trump's tariff plan for the film industry

Cnn
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Filmmaker and Hollywood financier are astonished by President Trump's announcement that he would like a 100% tariff for films that are produced outside the USA.

Several executives of film studio and streaming industries who spoke to CNN are almost apoplectic because, as they believe, the president did not think about the effects of his proposal, which could decimate an iconic industry.

Other sources use a more open-minded perspective and claim that Trump has a dialogue about a real problem-soded “out of control” tinning, which could be taken into account to some options.

“The first time it is blushed, it is shocking and would be practically complete production,” remarked an industrial insider. “But in reality he has no responsibility to do this, and it is too complex to enforce.”

Netflix's shares and other large entertainment companies fell on Monday when investors digested Trump's confusing comments.

“President Trump's social contribution last night scratched his head in Hollywood,” said Rich Greenfield, partner of Lightshed Ventures, in an analystnote.

Some of the industry sources that have spoken to CNN doubts that such a tariff plan will actually be implemented. As intellectual property, films are a form of services – no goods. Services are usually not subject to tariffs, and it is unclear how Trump's tariffs would work for foreign films.

In addition, Trump's claim that foreign film production represents a “national security threat” may not withstand the legal examination.

However, the executives of the entertainment industry take the possibility seriously. After two sources familiar with the discussions, several managers contacted the trade secretary Howard Lutnick about the tariff proposal. Lutnick on X reacted to Trump's tariff demand on Sunday evening and said: “We are there.”

Trump's social media post was perhaps only an open gambit. On Monday, a spokesman for the White House, Kush Desai,: “While no final decisions about foreign film tariffs were made, the administration explores all options to fulfill President Trump's guideline in order to protect our country's national and economic security and make Hollywood great again.”

The reference of the White House to “All Options” can calm down some nerves, since Hollywood lobbyists have been praised for some time on carrots (like a federal tax incentives for films) than sticks (like a tariff).

Film and television production, once in and around Hollywood, has increasingly focused on other countries than to other countries due to tax incentives and other financial calculations.

A wide range of films, from “low-budget india to studio blockbusters”, are currently being “manufactured in countries such as Great Britain, France, Germany and Hungary”, the variety of Entertainment Trade Magazine on Monday, while “shock and unbelief in the European film industry”.

Trump just let the idea sound when he spoke to reporters in the White House on Sunday evening.

“Other nations have stolen the films, the Moviemaking skills, from the USA,” he said, apparently referring to the growing number of films that are produced in other countries such as Canada.

“We should have a tariff for films that shop,” said Trump, possibly referring to films that are financed and distributed by American companies but were shot elsewhere.

The Motion Picture Association of America, the organization that represents important US studios, refused to comment on Trump's announcement. However, the MPA published a report in 2023 in which the US film industry costs a trade surplus of 15.3 billion US dollars with foreign markets, which corresponds to the triple value of the imported films. However, it is not clear whether the MPA contained domestic films that were produced abroad.

The questions about Trump's film duties are voluminous. Are films made by American companies, but are a historical drama from the Second World War in other countries to be determined to film in the places they are determined?

What about films that are partly produced in the USA and some in other places?

Some of the industry executives wondered whether Trump's idea was about the punishment of Canada, where many films are now being made due to tax incentives.

One of the sources asked and spoke of Hollywood to the left, “he trolls us because we didn't vote for him?”

And a manager asked if Trump really had a feeling for how modern television and film production works: “Has anyone told him what this will do with James Bond, Harry Potter, Dune? Where should we shoot Emily in Paris?”

Kate Irby from CNN contributed to this report.