President Donald Trump is opening a new salvo in his tariff war, as he threatened on Sunday to impose a 100% tariff on films made outside the U.S., saying the American movie industry was dying a "very fast death" due to the incentives that other countries were offering to lure filmmakers.
"This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda!" Trump said in a post on his Truth Social.
He said he was authorizing the relevant government agencies, such as the Department of Commerce, to immediately begin the process of imposing a 100% tariff "on any and all Movies coming into our Country that are produced in Foreign Lands."
"The Movie Industry in America is DYING a very fast death," he wrote, complaining that other countries "are offering all sorts of incentives to draw" filmmakers and studios away from the U.S.
He added: "WE WANT MOVIES MADE IN AMERICA, AGAIN!"
Commerce Secretary Howard Lutnick said on the social media platform X: "We're on it."
Neither Trump nor Lutnick provided any details on how the tariffs would be implemented. It was unclear if the tariffs would apply to movies on streaming services as well as those shown in theaters, or if they would be calculated based on production costs or box office revenue. Hollywood executives were trying to sort out details on Sunday night.
It's common for both large and smaller films to include production both in the U.S. and other countries. Big-budget movies like the upcoming "Mission: Impossible – The Final Reckoning," for instance, are shot around the world.
All major media companies, including Walt Disney, Netflix and Universal Pictures, film overseas in countries such as Canada and Britain.
On Monday, leaders in Australia and New Zealand responded to Trump's tariff announcement by saying they would advocate for their local industries. Some Marvel superhero movies have been filmed in Australia, while New Zealand was the backdrop for "The Lord of the Rings" films.
Incentive programs for years have influenced where movies are shot, increasingly driving film production out of California and to other states and countries with favorable tax incentives, like Canada and the United Kingdom.
Yet tariffs are designed to lead consumers toward American products. And in movie theaters, American-produced movies overwhelming dominate the domestic marketplace.
China has ramped up its domestic movie production, culminating in the animated blockbuster "Ne Zha 2" grossing more than $2 billion this year. But even then, its sales came almost entirely from mainland China. In North America, it earned just $20.9 million.
The MPA's data shows how much Hollywood exports have dominated cinemas. According to the MPA, the American movies produced $22.6 billion in exports and $15.3 billion in trade surplus in 2023.
Trump has made good on the "tariff man" label he gave himself years ago, slapping new taxes on goods made in countries around the globe. That includes a 145% tariff on Chinese goods and a 10% baseline tariff on goods from other countries, with even higher levies threatened.
By unilaterally imposing tariffs, Trump has exerted extraordinary influence over the flow of commerce, creating political risks and pulling the market in different directions. There are tariffs on autos, steel and aluminum, with more imports, including pharmaceutical drugs, set to be subject to new tariffs in the weeks ahead.
Trump has long voiced concern about movie production moving overseas.
Shortly before he took office, he announced that he had tapped actors Mel Gibson, Jon Voight and Sylvester Stallone to serve as "special ambassadors" to Hollywood to bring it "BACK-BIGGER, BETTER, AND STRONGER THAN EVER BEFORE!"
U.S. film and television production has been hampered in recent years, with setbacks from the COVID-19 pandemic, the Hollywood guild strikes of 2023 and the recent wildfires in the Los Angeles area. Overall production in the U.S. was down 26% last year compared with 2021, according to data from ProdPro, which tracks production.
The group's annual survey of executives, which asked about preferred filming locations, found no location in the U.S. made the top five, according to the Hollywood Reporter. Toronto, the U.K., Vancouver, Central Europe and Australia came out on top, with California placing sixth, Georgia seventh, New Jersey eighth and New York ninth.
The problem is especially acute in California. In the greater Los Angeles area, production last year was down 5.6% from 2023, according to FilmLA, second only to 2020, during the peak of the pandemic. Last October, Gov. Gavin Newsom proposed expanding California's Film & Television Tax Credit program to $750 million annually, up from $330 million.
Other U.S. cities like Atlanta, New York, Chicago and San Francisco have also used aggressive tax incentives to lure film and TV productions. Those programs can take the form of cash grants, as in Texas, or tax credits, which Georgia and New Mexico offer.
In 2023, about half of the spending by U.S. producers on movie and TV projects with budgets of more than $40 million went outside the U.S., according to research firm ProdPro.
Film and television production has fallen by nearly 40% over the last decade in Hollywood's home city of Los Angeles, according to FilmLA.
"Other nations have been stealing the movie-making capabilities from the United States," Trump told reporters at the White House on Sunday night after returning from a weekend in Florida. "If they’re not willing to make a movie inside the United States, we should have a tariff on movies that come in."
Former senior Commerce official William Reinsch, a senior fellow with the Center for Strategic and International Studies, said retaliation against Trump's film tariffs would be devastating.
"The retaliation will kill our industry. We have a lot more to lose than to gain," he said, adding it would be difficult to make a national security or national emergency case for movies.
