TRUMP ANNOUNCES 100% TARRIFS ON FOREIGN MADE FILMS CAUSING CHOAS

President Donald Trump has once again thrust Hollywood into the political spotlight, announcing plans to impose a 100% tariff on films produced outside the United States. The declaration, made via Truth Social on Monday, has sent shockwaves through an industry already grappling with unprecedented financial pressures and evolving production models.

"Our movie making business has been stolen from the United States of America, by other Countries, just like stealing 'candy from a baby,'" Trump wrote, promising the steep tariff on "any and all movies that are made outside of the United States."

A Threat Without Clear Details

While the announcement echoes similar threats Trump made in May, critical questions remain unanswered: How would such tariffs be implemented? Who would pay them? And perhaps most importantly, can you even place a tariff on a service rather than a physical good?

"Since movies aren't goods, they're services, it remains unclear how a tariff could be placed on a service," said Mike Proulx, vice president and research director at Forrester. "Should some logistical loophole be found and enforced, it'll cause chaos within the entertainment industry."

Jon Voight, Trump's appointed "special ambassador" to Hollywood, has attempted to clarify that tariffs would only apply in "certain limited circumstances," with the administration focusing instead on developing federal tax incentives, revising tax codes, and creating co-production treaties with other countries.

The Exodus from Hollywood

The threat comes as Hollywood faces an identity crisis. Once synonymous with a specific Los Angeles neighborhood, "Hollywood" now represents a scattered global industry where productions increasingly flee California's high costs for more affordable locations.

The numbers tell a stark story. Between 2022 and 2024, the United States saw a 26% decline in productions costing $40 million or more, while Australia and New Zealand experienced a 14% increase. According to a January survey of studio executives, Los Angeles ranked only sixth among global filming locations, trailing Toronto, the UK, Vancouver, Central Europe, and Australia.

The migration isn't random—it's economic. Over the past two decades, 38 U.S. states have invested more than $25 billion in filming incentives to attract productions away from California. International competitors have sweetened the deal further with generous tax credits, lower labor costs, and in some cases, universal healthcare for crews.

Canada, dubbed "Hollywood North," has hosted productions from "Suits" and "The Handmaid's Tale" to films like "Mean Girls" and "Twilight." Meanwhile, countries including the UK, Ireland, Hungary, Australia, and New Zealand have developed sophisticated filming infrastructure and skilled workforces to compete for major productions.

The Cost of Making Movies

Hollywood's production challenges extend beyond geography. Streaming has fundamentally altered the entertainment landscape, theatrical attendance has declined, and DVD sales—once a lucrative revenue stream—have essentially vanished. Studios must justify every expense to investors still calculating what the dissolution of traditional television means for media giants like Disney, Warner Bros., and Paramount.

Even high-profile productions have fled domestic shores. Christopher Nolan's star-studded "The Odyssey" and Mel Gibson's upcoming "Passion of the Christ" sequel are both filming internationally, despite Trump's connections to Gibson.

California Governor Gavin Newsom has attempted to stem the tide, increasing the state's film and TV tax credit to $750 million in July—nearly double the previous cap. But whether state incentives can compete with international offers remains uncertain.

Industry Concerns Mount

Beyond enforcement questions, industry experts worry about unintended consequences. Many productions film partially in the U.S. and partially abroad. Would films be taxed based on the percentage shot outside the country? What about foreign films seeking U.S. distribution?

"What if the primary studio is in the U.S., but the film has to shoot on location, because the story takes the characters on a journey?" asked Alicia Reese, analyst at Wedbush. "Is there a threshold? There are just too many questions."

Perhaps most concerning is the potential for international retaliation. Hollywood depends heavily on foreign box office receipts to recoup massive production budgets. China has already limited Hollywood films in its market. Other countries could follow suit if the U.S. imposes punitive tariffs.

"I strongly support bringing movie making back to California and the U.S.," said Democratic Senator Adam Schiff of California. "Congress should pass a bipartisan globally-competitive federal film incentive to bring back production and jobs, rather than levy a tariff that could have unintended and damaging consequences."

What Comes Next?

As the industry awaits clarification on Trump's announcement, one thing remains clear: Hollywood's challenges won't be solved by tariffs alone. The migration of productions reflects fundamental economic realities—from labor costs and tax incentives to the basic infrastructure needed to support modern filmmaking.

"We need to create a better tax structure to encourage more productions, the base of the production, the sound stages, to be located in the U.S.," Reese noted. "People are still going to have to film on location. The question is: how do we get the sound stages?"

For now, Hollywood finds itself caught between political rhetoric and economic reality, uncertain whether Trump's latest proclamation represents serious policy or another chapter in the ongoing drama between Washington and the entertainment capital of the world.