Hollywood executives rushed on Monday to interpret the call of President Trump for rigid tariffs about films produced outside the United States, a bomb proposal that would change how the films have been made for years.
Trump announced Sunday night that he was authorizing a 100% tariff on films “that enter our country that occur in foreign lands.” The proposal, like many other rates imposed by Trump, aims to bring a key return industry.
The studies film many of their feature films in Canada, Great Britain, Bulgaria, New Zealand and Australia. These countries offer incentives to attract high jobs in payment and obtain their reference points on the big screen.
“The film industry in the United States is dying a very fast death,” Trump wrote on his social platform of truth. “Hollywood, and many other areas within the United States, are being devastated.”
Study executives were surprised.
Many filmmakers would like to work in the United States, but prefer to see the government institute their own national tax credit. The tariffs, many argue, would accelerate the disappearance of the film industry instead of preventing it, because costs would increase. In addition, it is not clear how a rate on movies would work.
“No one knows it, and I don't suspect that we will do it for a while,” said a high -level film industry executive who was not authorized to comment. “Is it in foreign productions financed with national funds?
Governor Gavin Newsom asked Trump to create a Federal Federal Fiscal Credit Program that provides at least $ 7.5 billion in incentives to the studies that films in the United States, the governor contacted the White House on Monday night to encourage Trump to work with California to create a federal loan model after the state program with the aim of promoting national production.
Foreign production incentives have hindered the production economy of Los Angeles, which has been sick after COVID-19 pandemics closures, labor attacks and a reduction in traditional entertainment companies after losing billions of dollars in transmission services to compete with Netflix. January's forest fires in Pacific Palisades and Altadena treated another setback.
The production of television programs, feature films and commercials fell 22% during the first three months of the year, compared to the first quarter of 2024, according to the non -profit organization.
The main entertainment companies declined to comment. The president's announcement caused a frenzy of questions, including if the US companies, such as Walt Disney Co., Warner Bros. Discovery, Amazon and Netflix, would be subject to tariffs simply by filming a film outside the United States.
According to Motion Picture Assn data., The United States executes a commercial surplus of $ 15.3 billion with its entertainment exports.
“This creates incredible uncertainty in the industry,” said Nick Vyas, founding executive director of Randall R. Kendrick Global Supply Chain Institute in USC. “This is the only industry in which we have created a great advantage.”
The key details must be resolved, the White House warned on Monday. White House spokesman Kush Desai said in a statement that “no final decisions have been made on foreign film rates.”
Some crew leaders applauded Trump's instinct to protect US jobs.
“The studies pursue cheap production costs abroad while destroying the US workforce that the film and television industry built,” said Tean General President M. O'Brien, and the director of the Division of films Lindsay Dougherty in a statement.
But a film tariff would be complicated in practice.
Similar to Detroit's automotive industry, different production phases often occur outside the United States, such as adding special effects.
Tariffs are generally imposed when a product reaches an entrance port, at which time the registration importer must pay the tax before the article is released. That would not be feasible for movies, which are distributed digitally.
Digital products are not part of the normal tariff regime, which would make it difficult to determine its assessment, said Tony Gulotta, director and leader of National Fiscal Practice in Ryan, a global company centered on business taxes.
In addition to obstacles, the World Trade Organization also has a moratorium on digital trade taxes that extends until March 2026, he said.
Administration officials are expected to meet with study executives and MPA to seek clarity about whether tariffs will be based on the budget of a film, their income, prices of theater tickets or transmission service subscribers.
Another question: would television programs be included, many of which are filmed in Canada and the United Kingdom?
“This is not small,” Frank Albarella, a media and telecommunications executive of the KPMG consulting firm. “It could really be harmful to the industry.”
The call to improve US production occurs after Trump took advantage of a trio of actors, Jon Voight, Sylvester Stallone and Mel Gibson, to be their “special ambassadors” in Hollywood.
Voight and his manager, Steven Paul, traveled to Florida to present a plan for Trump during a meeting in person last weekend in Mar-a-Lago.
The plan was developed after meeting with Hollywood unions, studies and streamers, and addressed multiple potential ways to help the United States cinema business. Those that included federal tax incentives, co -production treaties with other countries, infrastructure subsidies, labor training and “tariffs in certain limited circumstances,” according to a statement from Paul's production company.
“The American film industry, and Hollywood, is a lighthouse to teach the American dream to the world and is an engine for the growth of employment and professional opportunity,” Paul said in the statement.
But it was Trump himself who came up with the tariff plan, said a White House official.
Congress leaders warned that tariffs were not the best way to boost the American film industry.
“If President Trump takes the maintenance of a dominant film industry and the maintenance of production jobs in the United States,” said representative Laura Friedman (D-Glendale), A former film producer, “I invite him to join me to fight for a national fiscal loan that levels the field of play on incentives abroad.”
Fugitive production is a tendency of decades, but leaders say that its impact on California has reached a point of crisis.
Programs such as “Bridgerton” of Netflix and films that include “Wicked” by Universal and “How to Train Your Dragon”, Warner Bros. “The Conjuring: Last Rites” and “The Fantastic Four: First Steps” by Disney's Marvel were filmed in the United Kingdom
In addition to the lowest labor costs, studies have moved abroad to give local flavor to productions for the public on those continents. The films often collect up to 60% of their income from the international public.
Some experts warned that imposing rigid tariffs could invite the reciprocal levies of other territories.
The news could also cushion the agreement at the Cannes Film Festival in France next week due to the uncertainty of the proposed policy.
Senior debt lenders have expressed concern about how this will affect the distribution, said Peter Marshall, director of Media Services at Epic Insurance Brokers & Consultants.
“If I wanted to tame a pump statement to frustrate the independent cinematographic sector, I would say it now, just before the world's largest market,” said Marshall. “This, I think, will almost certainly launch a large lever on that.”
Times staff writers Michael Wilner, Stacy Perman, Taryn Luna And Wendy Lee contributed to this report.
