Hollywood has reacted with confusion and concern after President Trump proposed an 100% tariff on all films produced outside the U.S.
Hollywood is in turmoil after President Donald Trump dropped a shock announcement Sunday night, proposing a 100% tariff on films produced outside of the United States. The entertainment industry scrambled Monday to understand the sweeping implications of what could be one of the most dramatic shifts in U.S. film policy in decades.
“The Movie Industry in America is DYING a very fast death,” Trump declared on his Truth Social platform, blaming foreign productions for devastating Hollywood and other parts of the country. His plan? Tax foreign-made films at a steep rate to bring movie jobs back to American soil.
For years, studios have filmed abroad in countries like Canada, the U.K., New Zealand, Australia and Bulgaria—drawn by generous tax incentives and lower costs. But Trump’s proposal could upend this long-standing model, which has allowed productions to stretch budgets and enhance international appeal.
Industry insiders were blindsided. “Nobody knows, and I don’t suspect we will for awhile,” admitted one high-ranking film executive, who questioned whether tariffs would apply to production costs, revenue, or both. Others raised practical concerns: How can digital films, which don’t pass through ports like physical goods, be taxed under standard tariff laws?
The White House later clarified that no final decisions had been made and that details were still being worked out. Spokesman Kush Desai said administration officials would be consulting with studio executives and the Motion Picture Association to iron out how the tariffs might be applied—by budget, ticket sales, streaming subscriptions, or other metrics.
One major sticking point is whether TV shows—many filmed in Canada and the U.K., like Bridgerton—would be affected. Studios are also concerned about retaliatory tariffs from foreign governments and the potential chilling effect on international box office revenue, which accounts for up to 60% of a film’s earnings.
This announcement arrives at a vulnerable moment for Hollywood. Following pandemic shutdowns, labor strikes, and industry-wide belt-tightening triggered by the streaming wars, Los Angeles’ production economy is already battered. FilmLA reported a 22% decline in production activity in Q1 2025 compared to the same period last year, compounded by January wildfires in the Pacific Palisades and Altadena.
Some in the industry argue that the solution lies not in tariffs, but in government support. “If President Trump is serious about maintaining a dominant U.S. film industry and keeping production jobs in the United States,” said Rep. Laura Friedman (D-Glendale), a former film producer, “I invite him to join me in fighting for a national film tax credit.”
Interestingly, the idea of revitalizing domestic film production had been floated in a proposal crafted by actor Jon Voight and his manager Steven Paul, who recently presented a detailed plan to Trump at Mar-a-Lago. That proposal, created after consultations with Hollywood unions and studios, included ideas like co-production treaties, job training, and limited tariffs. However, according to a White House official, it was Trump himself who decided to run with the broad tariff idea.
Adding further confusion, experts point out that films are often produced in pieces across several countries—sets here, VFX there—making it difficult to determine what qualifies as a “foreign” production. Digital distribution further complicates enforcement, with tariffs traditionally applied to physical goods entering ports.
Tony Gulotta, a tax expert with the global firm Ryan, warned that digital films don’t fit into the current tariff system, which makes valuation difficult. On top of that, the World Trade Organization has a moratorium on taxing digital trade that runs through March 2026, adding more legal complications to Trump’s plan.
The uncertainty is already being felt. With the Cannes Film Festival set to begin next week, insiders fear the proposal could cast a long shadow over international dealmaking. “If you wanted to time a bombshell statement to frustrate the independent film sector, you would say it now, right before the largest market in the world,” said Peter Marshall of Epic Insurance Brokers. “This will, I think, almost certainly cast a huge pall over that.”
As Hollywood reels, one thing is clear: Trump’s tariff proposal has thrown a multibillion-dollar industry into a storm of confusion—and everyone is watching to see what comes next.
