Trump threatens tariffs on movies, but experts say it may not be so simple
The film and streaming industry is the latest area of focus for U.S. President Donald Trump and his tariff strategy, but experts say there are many challenges to imposing tariffs on production companies.
Leading up to the election, Trump campaigned on reviving domestic manufacturing and production in the United States.
On Sunday night, Trump took to social media saying, “The Movie Industry in America is DYING a very fast death. Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States. Hollywood, and many other areas within the U.S.A., are being devastated. This is a concerted effort by other Nations and, therefore, a National Security threat.”
Trump spoke from the White House lawn on Monday telling reporters, “Other nations have been stealing the moving-making capabilities from the United States … and we’re making very few movies right now … Hollywood is being destroyed.”
It is still unclear exactly what film industry tariffs would look like or when they would be implemented.
Trump’s tariff policy thus far has featured specific duties added to products made abroad and imported into the United States, with the most significant duties including 145 per cent on imports from China.
But when it comes to films and streaming video content, tariffs could be more complicated as there is less of a tangible product to focus on and more of a service with many layers to deconstruct.
“It (the film industry) is not a single sector, it’s different aspects of a single sector,” says Charlie Keil, cinema studies professor at the University of Toronto, adding, “and it’s also not clear whether it makes sense to do it as a broad swath or to differentiate according to the level of input that comes from a non-American source.”
In addition, releasing movies in theatres amid tariff policy complicates matters for companies like Cineplex.
“If you buy a tangible product like, say a garment, if it’s more expensive (to manufacture), you expect to pay more for it,” Keil says.
“With films, we’re not used to differential pricing. Theatres don’t charge you according to what the film costs. So the question is, how is this tariff going to get passed on to the consumer?”
A White House statement on Monday from spokesperson Kush Desai clarified the administration’s intentions saying “Although no final decisions on foreign film tariffs have been made, the Administration is exploring all options to deliver on President Trump’s directive to safeguard our country’s national and economic security while Making Hollywood Great Again.”
Unlike with the automotive sector, a film’s production can reach various parts of the world, but ultimately still benefit the United States.
“The real business of the film business is about ownership, intellectual property control, and equity, and basically return on investment. So as long as the Americans control that, they control what really matters. It’s not where it’s made. It’s controlling all those other elements,” says Elevation Pictures co-president Noah Segal.
“His (Trump’s) fear of China’s electric cars is because China owns those cars. Well, in this case, Disney owns Mickey Mouse. They own it no matter where they make it.”
If Trump is successful at returning all the physical elements of film production to the United States, then Canada’s booming industry could be impacted.
“It could be very bad news if it pans out in that way. It’s all very provisional, but yeah, it could be devastating,” says Keil. “When we call it the Canadian film industry, what we really mean is a service industry supplementing the U.S. film industry.”
Ontario alone accounts for more than $3 billion worth of foreign film production annually with companies like Netflix, Amazon and Warner Bros. Pictures setting up shop in the province.
According to Statistics Canada, the domestic industry raked in $2.8 billion in revenue in 2023, which was a third higher than the previous report.
“We’ve seen this type of behaviour from the president before,” says Ontario Minister of Tourism, Culture and Gaming Stan Cho, speaking to reporters. “He’ll say one thing one day and the next day he’ll change his mind, so we’re hoping that he’ll realize just how huge this industry is as a driver and creator of jobs. We’ll have to wait and see if he follows through.”
globalnews
