Cannes: What Ever Happened to Tariffs?

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International film tariffs are just sooo last week.

Ever since Donald Trump expressed his intention on May 4th, through a caps-locked post, to impose a 100% tax on foreign movies, it’s become the primary topic of conversation within the film industry. The concept of a movie tariff system, being an unparalleled idea, has raised concerns that it could potentially disrupt, or even demolish, the worldwide framework for financing, producing, and distributing films.

Trump’s tariffs could potentially remain an option, given the POTUS’ tendency for distraction, yet in the sector, the conversation has already advanced.

Trump might still consider tariffs (taxes on imports), but because he gets easily distracted, it’s hard to tell. However, in the industry, they have already started discussing other topics.

On Monday, May 12th, Jon Voight and Sylvester Stallone, two of Trump’s representatives in the entertainment industry, along with a multitude of industry heavyweights such as the Motion Picture Association, production companies, and major labor unions, penned a letter to the president. In this letter, they advocated for the expansion and extension of tax incentives aimed at revitalizing film and television production within the United States.

The letter urged Trump to endorse three tax measures: Two proposals that aimed at increasing and enhancing deductions for production costs, and one that aimed at reinstating a previous rule during the COVID era, which lets businesses distribute net operating losses over a period of five years. This would be particularly beneficial in an industry like filmmaking, where success can be unpredictable, as it would let producers use profitable years to compensate for future losses.

The letter made no mention of tariffs.

On Tuesday, Andrea Iervolino, an independent film producer from Italy (known for movies like “Modì” and “Three Days on the Wing of Madness”), presented a new idea. This proposal, he said, had been endorsed by Mel Gibson, another special ambassador of Trump. The plan is for a U.S.-Italy co-production treaty, with the goal of creating a legal framework to motivate Italian film producers to make movies in the USA, featuring American actors and thus investing in the U.S., while also encouraging U.S. producers to shoot in Italy for similar benefits. The specifics of this proposed agreement are currently unclear.

Iervolino proposes that a U.S.-Italian partnership could be the foundation for future American coproduction agreements worldwide. He suggested this model could potentially bring in around $10 billion each year in investments within the U.S., though he did not provide a source for this significant figure. At the time, Gibson was unavailable to offer his perspective. It’s been reported that actor Mel Gibson, famous for his role in ‘Lethal Weapon’, is set to start filming the sequel to ‘The Passion of the Christ’, titled ‘The Resurrection of The Christ’, in Italy this coming summer.

It’s worth mentioning that the United States hasn’t entered into any international deals for joint production of films or TV shows with other countries.

As a gamer, I’m not sure if the Voight tax-break model or the Italo-American treaty proposal will ever make it off the drawing board, let alone survive till the weekend. However, they seem to signal a change in the game, moving us away from Trump’s heavy-handed strategy of imposing taxes as punishment on productions filmed outside the U.S., such as Mission: Impossible – The Final Reckoning, which premieres globally today and had a financing plan that included attractive tax incentives for global shoots in Norway, South Africa, and the UK. Instead, it appears we’re heading towards a strategy of using incentives as rewards.

International film producers, ranging from Sydney to Vancouver, embrace this change. They view tariffs in any form as an undesirable move and are preparing to oppose them.

On May 12th, over 100 global film and television organizations such as the European Film Academy, Screen Producers Australia, and France’s Société des Auteurs et Compositeurs Dramatiques banded together to pen an open letter urging governments worldwide to protect the structures that foster independent movie and audiovisual production.

Stuart Nash, former New Zealand minister for economic development, believes that if [tariffs] are implemented, it could likely cause severe damage to our film industry. As a manager of $650 million in film subsidies under the country’s tax incentive scheme, he played a significant role in attracting productions such as James Cameron’s Avatar sequels and Jane Campion’s award-winning The Power of the Dog to New Zealand.

Philippa Childs, who leads the British media and entertainment trade union Bectu, points out that tariffs, following the COVID pandemic and a production slowdown, could potentially deliver a decisive blow to an industry that is still in the process of recuperating,” (simplified version)

In contrast, tax breaks and joint production contracts serve as the universal language of international cinema production. Shifting the Make Hollywood Great Again discussion from President Trump’s intention to penalize films shot outside the U.S., towards a fresh system that could boost financing for both American and foreign movies, gives global filmmakers a sense of greater security.

Nicholas Tabarrok from Darius Films, a company based in both Los Angeles and Toronto, believes that entering into a co-production agreement with the U.S. would greatly advantage the Canadian film industry,” suggests. “The potential for collaboration with American screenwriters, directors, and actors is immense, which could result in increased box office revenue and sales of Canadian films.

John Morayniss, the co-founder and CEO of Blink49 Studios, based in Los Angeles, suggests that co-production treaties, initially designed to enable producers from smaller countries to collaborate more effectively against better-funded American imports, might be attractive to the U.S. entertainment industry as it faces a similar external challenge: High-end movie tentpoles that are filmed overseas, taking away American production jobs and leaving behind empty soundstages.

If America intends to move forward, it’s about safeguarding ourselves from an influx of foreign entertainment imports. In this context, perhaps Canadian content creators could offer assistance by leveraging their experience with international collaborations,” Morayniss suggested.

Multinational filmmakers foresee a mutually beneficial scenario whereby, rather than imposing penalties on foreign administrations for allegedly funding U.S. films with taxpayer funds as one producer put it, America could instead emulate the top-tier tax incentives of international counterparts abroad.

According to Nicholas Simon from Indochina Productions, a well-known production service company in South East Asia (responsible for shows like HBO’s The White Lotus), the most uncomplicated and non-confrontational approach would be introducing a federal incentive program. He recommends looking at the examples of Australia and the UK, aiming to combine their best aspects.

Noah Segal, a co-founder and co-president of the Canadian indie distribution company Elevation Pictures, shares with THR that the conversation should move beyond blaming Hollywood’s issues on runaway production. Instead, Segal believes that digital technologies, film tax credits, and other international funding sources offer financial and creative advantages for Hollywood producers to venture outside their traditional locations to produce projects.

Advancements in technology enable us to film locations globally, rather than replicating them artificially on a stage in Los Angeles, which previously appeared odd and overly theatrical,” he pointed out.

Nash acknowledges that possessing the ability to film globally offers a distinct “edge,” as it provides access to unique landscapes and talent that aren’t found in Studio City or North Hollywood.

He points out that we hold unique advantages that cannot be easily duplicated on a soundstage. Our surroundings are breathtakingly beautiful…We boast highly skilled crews and facilities such as Weta Workshop, renowned worldwide. Movies like ‘The Lord of the Rings’ and ‘The Hobbit’ are nearly impossible to produce anywhere else.

Segal feels reassured as the conversation moves from the idea of a foreign film tax and towards suggestions like a federal tax credit under the Voigt plan within the U.S., along with talks about co-production agreements between America and like-minded countries. He believes that such a carrot-only approach, without any sticks, might be something even President Trump could support to aid in the recovery of the American entertainment industry.

He proposed a method to motivate individuals to create co-productions in America. This approach would, in part, draw back some, but not all, of the business. The result being that it boosts his image as a hero and helps preserve some employment,” he continued.

If American creators agree to joint ventures for international productions, sharing intellectual property rights and the associated risks and returns, the advantages become apparent, Segal points out.

He pointed out that if they choose this path, they should realize it’s not a single direction, but a bi-directional route instead.

Daniel Bekerman, who worked as a co-producer on the Donald Trump series “The Apprentice,” believes that establishing official cross-border production partnerships between American producers and international collaborators in countries like Canada, Denmark, and Ireland would be mutually beneficial for the global film industry, including Hollywood.

He doesn’t see repatriating some production and some jobs back to the U.S. as a zero-sum game.

Though I’m based in Canada for my job, I collaborate frequently with numerous individuals from the United States. It’s important to me that my American acquaintances prosper. I hope to witness a strong and flourishing American workforce,” Bekerman expresses.

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2025-05-14 11:55