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US President Donald Trump on Monday announced plans to impose 100 per cent tariffs on movies produced overseas and distributed in the country. In line with his America-first agenda, he claimed that the American movie industry was “dying a very fast death” as filmmakers and studios moved away from domestic production, drawn by incentives offered by other countries.
In a post on his social media platform Truth Social, Trump called it a “concerted effort by other Nations and, therefore, a National Security threat”. “Hollywood, and many other areas within the U.S.A., are being devastated,” he declared.
“I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN! (sic),” Trump said.
Trump’s announcement comes against the backdrop of the volley of tariffs unleashed by the US President, including a 10 per cent blanket tariff on all countries exporting to the US and a 145 per cent levy on Chinese imports. As Trump extends his trade war to the film industry, let’s take a look at what’s happening with Hollywood.
The good
The American movie industry has a positive trade balance with every market in the world, according to the Motion Picture Association, a group representing leading studio houses and streaming services such as Disney, Netflix, Amazon-MGM studios, and Paramount, among others.
In its latest report, the group noted that the film and television industry exported more than three times what it imported in 2023. In other words, the American film industry made a lot of money exporting its products — USD 22.6 billion, to be precise.
The group also stated that the film and TV industry contributed USD 279 billion to the country’s economy, and generated 8.56 lakh jobs domestically, including production, marketing, manufacturing and distribution of motion pictures, television shows, and video content. This was less than the over 9 lakh jobs it generated in 2022, but more than the 8.22 lakh jobs it created in 2021.
The bad
While data shows that the American movie and TV industries are raking in high revenue worldwide, there’s growing concern as production moves away from Hollywood to cheaper locations.
For instance, Deadpool & Wolverine, the highest-grossing film in the US in 2024 after Inside Out 2 and a Walt Disney production, was shot mostly in the UK and Canada. Similarly, A Minecraft Movie, which ranks as the highest-grossing film of 2025 so far, produced by Warner Bros, was filmed primarily in New Zealand.
The domestic industry was already struggling to recover from pandemic-year losses when dual strikes by unions of screenwriters and actors in 2023 hit operations further. The unions were fighting for better pay and contracts, among other issues.
In 2024, massive wildfires struck Los Angeles, destroying key filming locations. Making matters worse, several behind-the-scenes workers, such as camera operators, sound technicians, and costume designers, were displaced from southern California.
FilmLA, a non-profit associated with the Los Angeles municipality, noted that overall production in Greater Los Angeles was 5.6 per cent lower in 2024 than in 2023.
Looking to cut costs, filmmakers and studios prefer shooting in locations that offer tax incentives and cheaper labour. A 2025 outlook report released by ProdPro, a private research firm, states that outside of the US, the United Kingdom, Canada, Australia, New Zealand and Germany have emerged as Hollywood filming hubs.
While the US still topped the charts, accounting for USD 14.54 billion worth of production in 2024, this was 26 per cent less than the production spending in 2022.
A survey of studio executives by ProdPro found that their top five choices for production were all outside of the US: Toronto, UK, Vancouver, Central Europe and Australia (in that order). California was ranked sixth, New Jersey was eighth and New York, ninth.
Last year, California Governor Gavin Newsom proposed increasing the tax incentive scheme to USD 750 million annually from the current USD 330 million, to bring back business to the state. New York Governor Kathy Hochul, too, has said she wants to nearly double the tax credit programme for films produced in the state to USD 800 million. Texas, meanwhile, is aiming to increase its tax credits to USD 450 million annually for movies and USD 48 million for TV production.
These credits essentially allow filmmakers to write off a part of their taxes and free up budget for cast, crew and other expenses.
As states look to ramp up domestic production with rebates, Trump has chosen the tariff route. It, however, remains unclear how the Trump administration would impose the tariffs, given that big-budget films usually span across locations in and outside the US. Would the tax be imposed on film tickets at the theatre or also on streaming platforms? Would the tax be based on production costs or box office revenue? These questions remain unanswered as of now.
His announcement has sparked fears of retaliation from other countries. Increased tariffs on the distribution of American films may shrink their markets and hit revenues.
Worldwide, the top 10 highest-grossing films in 2024 were all produced by American studios, according to The Numbers database. Within the US, the top 50 films featured no foreign production films.
