The proposal by President Donald Trump to impose 100% tariffs on films “produced in foreign lands” has shaken the foundations of the global film industry. The measure, presented as a matter of national security and economic protection, has been met with a mix of confusion, rejection, and alarm from filmmakers, governors, and international trade experts. Below, we explain the key facts behind this controversial initiative.

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1. What is Donald Trump proposing with tariffs on foreign films?

On April 28, Donald Trump announced via his Truth Social network that he would authorize the Department of Commerce and the United States Trade Representative to begin the process of imposing a 100% tariff on all films produced outside the country. According to his words, “the movie industry in America is DYING a very fast death,” accusing other countries of luring U.S. studios with tax rebates and incentives, which he claims poses a “national security threat.”

The measure would include films “produced in foreign lands,” although it remains unclear whether this refers to filming locations, postproduction, financial incentives, or international participation in co-productions.

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2. Why is this measure considered highly damaging to Hollywood?

Despite Trump claiming he does not intend to harm the industry —“I’m not looking to hurt the industry, I want to help the industry,” he told CNBC— analysts agree the potential damage could be substantial. Nearly 45% of the U.S. box office revenue for many blockbuster films comes from productions shot abroad, such as Avatar, Minecraft, Avengers: Doomsday, or Mission: Impossible – The Final Reckoning. The list in this category is endless.

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If the tariffs are applied retroactively or based on unclear criteria, studios could face additional costs that may exceed hundreds of millions of dollars per title.

3. What would the consequences be for platforms like Netflix?

One of the most controversial aspects is the lack of distinction between theatrical films and streaming content. Series such as Squid Game, Money Heist, and The Crown are non-American productions that are extremely popular in Netflix’s U.S. catalog. The big question is whether the platform would have to pay tariffs for offering these titles to subscribers, and how that amount would be calculated.

As host Jimmy Kimmel sarcastically commented: “Sonic, the illegal immigrant hedgehog, is a national security threat and must be stopped!”

4. Job losses in Hollywood

Trump has a point when he denounces job losses in Hollywood. According to FilmLA, filming in Los Angeles dropped 22% between January and March this year. In the past decade, film production in the U.S. has declined by nearly 40%. Studios like Marvel have moved major productions to places like Atlanta or London to take advantage of tax credits.

However, without a federal tax incentive to offset the cost of filming in the U.S., tariffs alone won’t bring productions back.

5. Gavin Newsom responds

California Governor Gavin Newsom proposed a federal tax incentive program worth $7.5 billion to strengthen domestic production, building on California’s successful state program, which currently has a $750 million fund.

Senator Adam Schiff also condemned the tariffs and offered an alternative: “We have the opportunity to work together to pass a major federal film tax credit to re-shore American jobs in the industry.”

6. What are the risks for international film distribution?

One crucial but rarely discussed scenario is the possible impact on the foreign film market in the U.S. Distributors like Neon, Mubi, and Sony Pictures Classics rely on acquiring European, Asian, and Latin American films at competitive prices. If those costs double due to tariffs, that cultural access may vanish.

And a disturbing question arises in this context: What would be the implications for American intellectual and cultural life?

7. Could Donald Trump’s tariffs impact international postproduction?

Globalization in cinema is not limited to shooting locations. Visual effects companies like Weta FX (New Zealand), Framestore (UK), and Scanline (Canada) handle a large portion of digital work for U.S. films. If tariffs also apply to foreign postproduction work, it would affect a value chain that is now global and decentralized.

However, it must be noted that the scope of the measure remains unclear. On this matter, there are more questions than concrete answers.

8. What would happen to international co-productions?

The collaboration of multiple countries has produced outstanding films. A recent example: The Brutalist, Oscar-nominated and made as a co-production between the U.S., the UK, and Hungary. Such films —most of them independent— would be heavily impacted. Many mid-budget and low-cost action movies only exist thanks to filming incentives in Eastern Europe, as noted at the Cannes Marché du Film.

Stricter fiscal conditions could completely discourage these models, sidelining independent filmmakers.

9. How might other countries respond?

Unlike other sectors affected by the trade war, the entertainment industry is one of the few areas where the U.S. holds a significant trade surplus. According to the European Audiovisual Observatory, 71.1% of cinema tickets sold in Europe in 2023 were for American films. If countries affected by the tariffs respond with similar measures, Hollywood could see its global market share shrink in regions where it has traditionally dominated.

With information from The Guardian, CNN, and Hollywood Reporter