President Trump Threatened Massive Tariffs On The Film Industry, But There Are Some Basic Questions That Need To Be Answered

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Over the weekend, President Trump expressed his dissatisfaction with the film industry on social media, suggesting he’s ordered the Department of Commerce to initiate tariffs on all movies filmed abroad. This announcement sparked concerns across social media about potential implications for various movie studios and production companies. In response, some major media firms experienced drops in their stock prices. Despite this, there is currently a lot of ambiguity as no specific timelines or details have been provided, leaving many questions unanswered regarding the actual impact.

Let’s take a moment to discuss the current situation of the U.S. film industry, particularly in Los Angeles, before we delve into your questions. As per President Trump’s recent post, the movie-making sector has been struggling in Hollywood, and the data seems to support this claim.

As per the latest report from FilmLA, which oversees filming permits in LA, there’s been a significant drop in shooting activity. Compared to last year, it’s down by more than 20%. Interestingly, television production has seen an even steeper decline, almost half of the average over the past five years. In the first quarter of this year alone, only 13 pilots were filmed in LA – the lowest number since FilmLA began tracking data. Additionally, usage of sound stages and permits issued have also decreased. Many industry professionals in LA are expressing concerns about finding work, suggesting a potential issue at hand. The puzzle is figuring out what’s causing this shift.

In a recent social media post by President Trump, he accuses other countries of making intentional efforts to entice filmmakers to shoot movies on their territories by providing special incentives. Here’s the full text if you’d like to read it: [insert link or quote here]

It’s straightforward to confirm that certain events are taking place. Notably, locations within the United States, particularly Georgia, have been actively offering generous tax breaks and incentives for productions filmed in the state. In fact, they’ve even created brochures specifically designed for movie studios and independent filmmakers, detailing how the system works, and it has proven effective.

Currently, Georgia surpasses all other states in terms of on-location filming for movies and TV shows, trailing only California and New York. This trend has led to a significant challenge for California over the past few years, prompting Governor Gavin Newsom to advocate vigorously for expanding California’s own tax incentive program to remain competitive. A bill addressing this issue is currently under consideration in the state legislature.

Essentially, what President Trump mentioned is applicable to other nations as well. For instance, Vancouver in Canada has turned into a popular destination for movie and TV production, bringing in almost 2 billion dollars annually. This figure was anticipated to grow further, given that local authorities have recently approved more generous incentives to attract more productions. Similar trends are observed in Mexico, where lower costs and attractive tax breaks make it an appealing choice. The UK, along with other European countries, are following suit and actively wooing major studios with their own competitive offers.

Essentially, when it comes to filmmaking, whether small-budget or big-ticket productions, companies are increasingly seeking out the most advantageous deals – a practice often referred to as “incentive shopping”. This trend applies regardless of where the production is based, be it in the U.S. or abroad. Even actors have grown accustomed to this reality and openly discuss the inner workings of the process. If a studio can film somewhere at a lower cost, they usually will, and with escalating costs in Los Angeles, particularly in Hollywood, many production houses are finding other locations more appealing.

Something Else Is Going On Too Though.

From the 1990s through the 2000s, major Hollywood studios typically put out over 110 films per year on average. However, this average has struggled to surpass 80 in recent years. The numbers for TV shows are equally concerning – in 2018, more than 16,000 episodes of television were produced, but by 2024, this number had barely reached 11,000 episodes.

As streaming services rose to popularity, traditional cable TV was running close to full capacity. Primetime slots on major networks were packed, while many cable networks were producing their own original content, and premium channels such as HBO were in the middle of a creative resurgence.

Over the past several years, Netflix has been the exception, while most other streaming services are scaling back. These platforms continue to grapple with profitability, leading them to cut production costs. Many cable channels no longer create original content, and even major television networks have decreased their investments, sometimes choosing to cancel high-cost shows due to financial constraints.

Currently, I find myself observing an interesting situation unfolding in the world of cinema. It seems that many production companies are scaling back on the number of films and TV series they produce. Add to that the increased competition from other states and nations, offering incentives and affordable filming locations, and it’s like Hollywood is navigating a turbulent sea. A perfect storm, if you will, of challenges.

So, Would Tariffs Help? And How Would They Even Work?

As a moviegoer, I must admit, predicting the consequences of potential tariff implementation is challenging because we lack insight into their specific form. President Trump has hinted at the introduction of 100% tariffs, yet we remain unsure about the methodology behind their calculation.

Is it possible that for films made outside the U.S., half of each ticket sold could go towards the government? This could lead to increased theater prices for these movies, potentially causing a significant drop in their box office success.

Instead of going to theaters, if a film is released directly on streaming platforms, could there be a fee charged based on its production cost? For instance, if a movie costs $50 million to produce, would the producers be required to pay something similar to a fine or penalty to the U.S. government, much like how luxury taxes are levied in professional sports when a team exceeds the salary cap?

Nothing in this discussion covers television royalties, future rights payments, or numerous other complex aspects. Creating art is not like manufacturing products; it’s far more intricate. However, that doesn’t make the challenges insurmountable. It simply means predicting how everything will unfold can be quite complicated.

What’s Going To Happen?

No one knows.

Since President Trump assumed office, there’s been much discussion revolving around tariffs. He’s publicly committed to making America’s trade deals more equitable, yet there’s a broad spectrum of opinions among analysts and commentators regarding the definition of fairness in this context.

Over the past 100 days, President Trump has expressed several different viewpoints. At one time, it appeared he was considering imposing significant tariffs on almost every nation globally. However, after some discussions, most of these tariffs were temporarily halted to allow for new trade agreements to be developed. These agreements are currently being worked out, and it remains unclear what their final form will be or when they will take effect. Consequently, there will likely be a period of uncertainty regarding the potential film tariffs for some time.

Numerous film professionals in Hollywood are expressing concern that the current model of the film industry could be nearing its end. Their belief is that studios may struggle to produce the same kind of films they’ve been making in Los Angeles at their current budgets, leading to potential cost cuts or fewer movies being made. Additionally, they fear that other countries might impose taxes on American-made films, significantly decreasing international earnings.

Some people are hesitant about implementing tariffs, as they believe the existing tax incentive structure is not beneficial for anyone. They advocate for a significant overhaul in business practices, arguing that only a drastic shake-up can prevent Hollywood from further losing market share to other countries. Moreover, they question whether tariffs could potentially keep animation and VFX jobs within the U.S. instead of outsourcing them abroad.

At present, our best course of action is to stay patient as we await additional details, and pay close attention to public statements made by key studios regarding potential impacts on their operations.

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2025-05-05 19:08