In a recent social media post, President Donald Trump declared that a 100% tariff would be imposed on the movies made outside of the U.S. Trump stated that he aimed to revitalize the dying domestic movie industry. He authorized the Department of Commerce and the United States Trade Representative to begin the process.
At this time, it is unclear how Trump’s proposed tariffs would be implemented or what would be considered a non-U.S. film in today’s industry. It is also uncertain which movies would be affected by these tariffs and whether streaming services and movies shown in cinemas would be included.
Trump’s announcement came after a January meeting with Mel Gibson, Jon Voight and Sylvester Stallone, his “Special Ambassadors.” Voight commented that Hollywood was “in pretty bad shape” and that he feels “fortunate to have a president who wants to restore Hollywood to its former glory.”
Stallone is frequently a guest at Trump’s Mar-a-Lago club and describes him as “the second George Washington.” Voight said he presented Trump with a plan to save the American film industry. Voight’s advisor, Steven Paul, wrote that all the ideas found in Voight’s proposal were only for the sole purpose of discussion, and the draft document itself was not meant to be shared publicly.
This plan includes federal tax incentives, co-production treaties with foreign countries and subsidies for owners of TV production and film companies. Voight also suggested that a 10% base rate federal tax credit could be granted to productions that meet the “American cultural test.”
As for what the test is and what is needed to pass, it is still unknown, and what exactly the Special Ambassadors will be doing to improve the situation within the U.S. movie industry is yet to be seen.
Whether it is for the stunning locations, tax incentives or lower production costs, many studios have shot some, if not the entirety of their scenes, overseas. Uncertainty about what would fall under the criteria of being taxed, including visual effects, co-productions and international film financing in the production process, remains.
According to a report by FilmLA, a nonprofit stationed in Los Angeles that handles film permits, there was a decline of more than 22.4% in on-location filming in the first quarter of 2025 compared to the year before.
Since the 2023 Hollywood strikes, movie production has not returned in full force. The main reason that American companies choose to shoot abroad is for more affordable costs.
Without domestic tax incentives or rebates to offset expenses, the lower costs of filming abroad make shooting in the U.S. less competitive, contributing to a decrease in domestic production.
The implementation of tariffs is not enough to boost movie production within the national borders and may adversely impact the domestic movie industry. Smaller studios might also find it difficult to produce more movies as costs threaten to potentially increase by 30 to 40%.
