Source : the age
By Karl Quinn and Jasper Ward
US President Donald Trump has announced a 100 per cent tariff on all movies produced outside the United States.
The latest front in Trump’s global trade war has been opened in response to what he claims is an existential crisis facing Hollywood, a part of the economy with which he has often not seen eye-to-eye.
Shot in Sydney, Anyone But You, starring US actors Sydney Sweeney and Glen Powell, is among recent films supported by the Australian government’s Location Offset program.
Announcing the move on his favoured social media platform, Truth Social, on Sunday (US time), Trump claimed “the Movie Industry in America is DYING a very fast death … Hollywood, and many other areas within the USA, are being devastated”.
Tariffs are applied to imported goods and services, and a 100 per cent impost on foreign-made movies would effectively make it twice as expensive for US distributors to bring such titles into America.
Assuming those costs are passed onto consumers via higher ticket prices, that would make it unviable to show all but a handful of foreign movies in cinemas.
But while many foreign-made films do make their way into the US, the impact they have on Hollywood’s revenues is, in fact, minimal.
According to a 2018 survey by industry analyst Stephen Follows, almost one-fifth of the films released in the US between 2003 and 2017 were made in languages other than English. But their box office share was barely 1 per cent. (It should be noted that titles from English-speaking territories such as the UK, Australia, New Zealand and Canada are not captured by that analysis.)
However, the real target of Trump’s tariff action is not foreign movies at all. It is, rather, Hollywood’s use of other countries to make its movies. And that could have strong repercussions for Australia, with NSW and Queensland, the states most favoured for Hollywood movie production, likely to be especially hard hit. Other states, including Victoria, will suffer too if the move extends to TV production, which would appear likely.
“Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States,” Trump said in his statement. “This is a concerted effort by other Nations and, therefore, a National Security threat.
“It is, in addition to everything else, messaging and propaganda! Therefore, 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!”
Speaking to media on the White House lawn after announcing the move, Trump claimed “other nations have been stealing the movie-making capabilities from the United States … we’re making very few movies now. Other nations, a lot of ’em, have stolen our movie industry. They’re not willing to make a movie inside the United States.”
It is true that Hollywood studios have moved much of their physical production activity offshore, attracted by tax incentives that make it cheaper to film elsewhere than California.
Australia offers a 30 per cent incentive to foreign productions shooting here through the federal government’s location incentive, with state governments typically offering between 10 and 15 per cent on top of that. Post-production and digital effects work is supported by a 30 per cent federal rebate, with some states also offering an additional 10 per cent.
Many other countries offer such incentives – though Australia’s are among the most generous. Numerous US states offer them as well.
Hollywood studios have happily adopted a “footloose” approach to production, following the tax dollars and sound stage availability around the world.
But Hollywood still dominates the movie business. According to thenumbers.com, the US produced 1151 movies in 2024, and claimed almost 70 per cent of global box office.
In 2023-24, Australia recorded a spend of $768 million by foreign (mostly Hollywood) film and television productions, including for post, digital and visual effects production work only. That was down 38 per cent on the year before, and 13 per cent below the five-year average.
In response to questions from this masthead, federal Arts Minister Tony Burke indicated his government would not take the move lightly.
“I’ve spoken to the CEO of Screen Australia, and we’re monitoring this closely,” Burke said.
“Nobody should be under any doubt that we will be standing up unequivocally for the rights of the Australian screen industry.”
Matthew Deaner, chief executive of lobby group Screen Producers Australia, said it was unclear “what this announcement means in practice or how it will be applied and implemented”, but predicted “no doubt it will send shockwaves worldwide”.
Deaner added that the move “reinforces the need for the government to focus immediately and swiftly on building a resilient local industry that can withstand global shocks like this”.
Though Trump framed it as a move in support of Hollywood, the tariff move is likely to be met with a complex response there.
For the studios, the imposition of a 100 per cent tax on any film produced outside the US effectively wipes out any advantages afforded by shooting offshore, forcing them to bring work back to the US. And that means, for the unions representing crew, the move could be popular.
But nothing in the world of tariffs is ever that simple. It is already more expensive to film in the US than elsewhere, which is precisely why the studios opt for foreign locations. A flood of projects in the US would not only make productions more expensive, it would drive up the cost of crew, which could have a further inflationary impact and ultimately flow on to the cost of tickets at the cinema, which could reduce attendance.
Trump’s 100 per cent movie tariff may be designed to stave off Hollywood’s fast death. But it just might hasten it instead.
With Michael Koziol and Reuters
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