Hollywood in Check: The Impact of the Tariff on Foreign Films
What has Trump announced about foreign films? Context and veracity
Trump has announced that he wants to impose a 100% tariff on all films produced outside the United States.
He made it public on May 5, 2025 on his Truth Social network., stating that Hollywood and parts of the US are being “devastated” due to the incentives offered by other countries.
His message was clear:
I authorize the Department of Commerce and the United States Trade Representative to immediately begin the process of imposing a 100% tariff on all foreign-produced films entering our country.
Is this a law already in force or just a proposal?
No, the 100% tariff on foreign films is not in effect..
In this preliminary announcement, not of an executed measure.
Trump has ordered the Department of Commerce and the Trade Representative to begin studies to implement it, but The White House has clarified that no final decision has been made..
This means that, for now, there is no tariff, but there is a clear intention to implement it.
This type of announcement seeks to generate immediate impact on the industry, although require legal process and can be challenged.
Can the United States legally impose a cultural tariff?
The legality is questionable and probably challengeable.
Trump could try to apply the tariff under the Section 232 of the Trade Expansion Act, citing national security reasons.
Nevertheless:
- The state of California itself (the epicenter of the industry) has doubts about legal base to impose this measure.
As a spokesperson for Governor Gavin Newsom noted:
"We believe he lacks the authority to impose tariffs under the International Emergency Economic Powers Act."
Economic impact of the 100% tariff on the film industry
How would it affect the importation of foreign films into the US?
The 100% tariff would double the price of any foreign film shown in the U.S. This would make many distributors discard directly buy titles produced outside the country, since the cost would become unsustainable.
Expected direct effects:
- The presence of foreign films in theaters would be drastically reduced.
- Independent and art-house cinema would be the most affected.
- Festival markets, such as Cannes, are expected to see a decline in interest from American buyers.
According to an industry executive:
“Tariffs basically destroy independent film.”
Furthermore, The measure would generate operational uncertainty, since it is not clear how a film will be defined as “foreign”:
- Where was it filmed?
- By country of study?
- By the nationality of the director or the actors?
Result: many mixed films or co-productions could be left in fiscal limbo.
What consequences would this have on global film production?
Hollywood relies on filming abroad to reduce costs: Canada, the United Kingdom, Australia, Hungary, among others, offer tax incentives of up to 40%.
If these productions were to be taxed at 100% because they were not filmed entirely in the U.S., the result would be:
- Decrease in international filming, which would raise the budgets.
- Cancellation of productions that would no longer be economically viable.
- Job losses in foreign film industries that today depend on Hollywood.
Real examples:
Mission Impossible and Marvel movies are filmed in several countries. They could be affected if they are deemed not 100% "American."
Does this put the international co-production and filming model at risk?
Yes, the tariff would break the model of international collaboration that has sustained cinema over the past two decades.
The co-productions between countries They allow for sharing costs, talent and access to grants.
With this measure:
- International agreements would decrease of production.
- Global films could lose key funding if they are not guaranteed a US release.
- US allied countries could respond with barriers to Hollywood movies.
The United States generates more than $22.000 billion in film exports.
If a cultural trade war breaks out, that surplus could disappear.
Consequences for Hollywood: Competitive Advantage or Boomerang Effect?
Will this tariff benefit US domestic production?
If implemented, the 100% tariff would eliminate much of the foreign competition in the U.S. market.
Films produced outside the US would be excluded or become too expensive to import, leaving Hollywood's green light in the country's movie theaters.
Esto temporarily reinforces the local market share.
But this advantage is apparent and limited:
- Hollywood now dominates the US box office.
- The diversity of supply would be reduced.
- The tariff It does not solve the high costs of producing within the country.
Will the number of film shoots in the United States increase?
Not necessarily.
Although the tariff aims to repatriate filming, The costs of producing in the US remain higher than in other countries:
- Unionized labor.
- Lower tax incentives compared to other markets.
- Higher overall production costs.
In addition, many Hollywood movies depend on international filming to reduce costs and for creative demands.
If filming abroad penalizes the US release, Studios could choose to cancel or reduce projects.
Possible outcome:
- Less filming abroad, but not necessarily more in the US.
- Reduction in the total number of films in production.
- Market contraction and loss of narrative diversity.
Could Hollywood film exports be in danger?
Yes, and significantly so.
The United States has a trade surplus in the audiovisual sector: in 2023, exported more than $22.600 billion in film and television, with a positive balance of more than 15.000 billion.
If the US imposes unilateral barriers to foreign films:
- Other countries could retaliate against American films.
- A would be opened cultural trade war.
- Key markets such as Europe, China and Latin America could limit the entry of Hollywood productions.
The 100% tariff and its effects on salaries, employment, and wages in the film industry
What will happen to the salaries of actors, directors, and technicians?
If the tariff is implemented, there could be mixed effects in wages within the United States:
Possible increases:
If filming in the US increases, more local contracts would be generated for actors, technicians and directors, which could increase their workload and maintain current salaries.
Risks of reduction:
- If the total number of productions decreases (due to increased filming costs or project cancellations), studios could cut budgets.
- This would directly affect salaries, especially outside the circle of big stars.
In summary: Top salaries could be maintained, but middle and low incomes in the sector would be the most exposed if global production falls..
Will jobs be lost in countries that host Hollywood filming?
Yes. The impact abroad would be immediate and negative.
Many countries have developed strong film industries thanks to Hollywood's international filming:
- Canada, United Kingdom, Australia, New Zealand, Spain, among others.
If Hollywood productions stop filming outside the U.S. to avoid sanctions or tariffs:
- Thousands of jobs in studios, suppliers and technical staff would disappear.
- Some countries have already expressed formal concern (like Australia or the United Kingdom).
- The local economy of many regions would be affected (hotels, transportation, services, etc.).
How are the sector's unions and associations responding?
Major American unions and associations—such as SAG AFTRA (actors) and IATSE They welcome the idea of attracting filming back to the US., But have not directly supported the 100% tariff.
In the case of IATSE:
- They support the reactivation of local employment.
- prefer federal tax incentives before trade sanctions.
- They ask that workers in the sector in other countries with whom they collaborate not be harmed.
The president of IATSE was clear:
“Any eventual trade policy must not harm our Canadian members or the industry in general.”
This reflects that Even within the US, the measure is divisive. due to its destructive potential at an international level.
Will movie prices go up in the US? Tickets, new releases, and in-theater offerings
Can the tariff increase ticket prices?
Yes. If the 100% tariff goes into effect, many films will face high additional costs that studios and distributors will want to recover.
This can be translated into:
Increase in ticket prices in theaters, especially if the production or distribution has assumed the impact of the tariff.
Cost transfer: Studios will pressure exhibitors to offset the rising costs, and these, in turn, will adjust ticket prices for the public.
Will there be fewer movies available in theaters?
Very likely. The tariff will increase the cost of both importing foreign films and producing those shot outside the U.S. This will lead to:
- Fewer international films in theaters.
- Less rotation of releases, especially during the week.
- Reduction in the variety of genres and styles (arthouse and festival films will be the most affected).
In addition, if certain international releases had to assume the tariff, their Entry into the country could become economically unviable.
Result: a more limited lineup, with a heavy reliance on blockbusters from American studios.
How will public attendance be affected?
The risk of loss of viewers is tall:
- A higher box office price may discourage those who already rarely go to the cinema.
- A poorer movie schedule (less diversity, fewer new releases) reduces the appeal of frequent moviegoing.
- Some viewers will look for international content on streaming platforms, where the tariff would have no direct impact.
Important: American cinema is already facing a fragile recovery after the pandemic and the strikes of 2023. This measure could further slow down the return of audiences to theaters.
Film industry reactions to Trump's tariff
What do studios, producers, and distributors think?
The reaction has been immediate and almost unanimous: worry, disbelief, and rejection.
Producers, executives and agents described the measure as:
- Misconceived
- Harmful to business
Most frequent criticisms:
- The tariff lacks legal and operational details.
- It could destroy the independent industry.
Featured statements:
“Trump is going to destroy Hollywood,” said a British producer.
“Will James Cameron not be able to film the new Avatar movies outside the country?” a British producer asked.
The consensus: The measure creates more problems than solutions.
Are there any proposed alternatives to the 100% tariff?
Yes. Even people close to Trump have advocated different approaches.
Actor Jon Voight, appointed by Trump as "Hollywood ambassador," proposed an alternative plan:
- Expand the tax incentives to film in the USA
- Changes in tax codes.
- Apply tariffs only in “limited” cases.
Conclusion: Temporary threat or structural shift in international cinema?
Summary of risks and possible scenarios
Trump's announcement of a 100% tariff on foreign films It is real, but it is not yet in force.
This is a preliminary order, without definitive regulatory support, but with a clear political intent.
If it were to be applied, its possible effects would be:
- Immediate reduction of foreign films in the US
- Price increase in inputs and production costs.
- Job loss in countries that today attract international filming.
- Risk of retaliation by other countries against Hollywood.
- Less diversity in the movie lineup and a drop in movie attendance.
In the short term, it may seem like a protectionist measure.
But in the medium and long term, It is a threat to the very sustainability of the global film industry.
CFGS in Marketing and Advertising and Administration and Finance. RRYP marketing specialist.
