‘Make Hollywood Great Again’ Trump Proposes Tariffs to Boost American Film Production

In a posting on Truth Social, Trump claimed that foreign incentives drawing filmmakers away from the United States constitute a “national security threat” and instructed the US Department of Commerce and the US Trade Representative to initiate the tariff process. This announcement led to immediate declines in the stock prices for major entertainment companies, reflecting investor concerns about the potential impact on the global film market.

While the American film industry shares Trump’s concern about erosion to the US’ competitive edge in film production, many believe that tariffs are not the solution. Concerns from industry insiders, generally fall into two buckets. First, is the uncertainty as to how such tariffs would be implemented and what they would apply to. Examples of these issues include whether such tariffs would extend to streaming platforms, apply retroactively to films already released and/or finished films pending release, apply to other forms of content (e.g., series), require films to be entirely produced and/or shot within the United States, and implications for post-production services.

Second, is the uncertainty as to the potential economic impact of the tariffs. Some of the worries being expressed are potential increased production costs, increased theatre ticket or streaming subscription prices, significant job cuts, and retaliatory tariffs affecting other creative industries and intellectual property. Many argue that enhancing domestic film production would be better achieved by offering more “carrots” such as federal tax credits for television or film production within the country.

Concern for the US film industry is supported by the numbers and relatively recent events. Los Angeles, a city deeply affected by the globalization of film production, has seen a decline in film production by over 30% over five years. Contributing factors to the decline include financial incentives offered by other countries and overlapping strikes by the Writers Guild of America and Screen Actors Guild in 2023. There is anticipation that the downturn for Los Angeles may be exacerbated by the devastating 2025 wildfires.

To address the sharp decline, last year, California Governor Gavin Newsom proposed increasing the state’s annual film production tax credit from $330 million to $750 million. In response to Trump’s tariff proposal, Governor Newsom has suggested working with the federal administration to create a $7.5 billion federal tax incentive to boost domestic film production.

Since Trump’s post on Truth Social, the Trump Administration has offered some clarification by releasing a statement to various news outlets, asserting that no “final decisions on foreign film tariffs” have been made. While speaking to reporters in the Oval Office, Trump stated that he plans to meet with the film industry to “make sure they’re happy with it, because we’re all about jobs.” As the proposed tariffs could have significant impacts on production, distribution, and international collaboration of intellectual property, AFS will continue to closely monitor the developments.