This time, it’s a movie. President Trump announced in his social media post on the 4th that he plans to impose a 100% tariff on movies made overseas. This means that he will extend the tariff to the entertainment sector.
According to Bloomberg and other foreign media on the 5th, President Trump said in the post that he ordered the U.S. Department of Commerce and the U.S. Trade Representative (USTR) to “immediately start” the process of imposing tariffs on foreign films. He added, “I want a movie made in the U.S.”
Trump also said foreign films pose a threat to national security and that other countries are using them to convey messages and promote them.
When Bong Joon-ho’s film Parasite swept the Academy Award in early 2020, Trump also criticized that “the Academy Awards were a mess,” saying, “It gave awards to Korean movies with a lot of trade issues.”
Following President Trump’s post, Secretary of Commerce Howard Rutnick also posted on his social media account, “We’ve started to solve it.”
Trump reportedly met with actor John Voight and his manager Stephen Paul at the Mar-a-Lago club over the weekend, sources said.
Both Voight and Paul proposed to the president a plan to expand federal tax incentives for U.S. film and TV productions. These included expanding existing tax incentives and reviving expired tax incentives. Voight did not offer tariffs, but the president mentioned them, the sources said.
In January, President Trump appointed Republican-supporting Voight, actors Mel Gibson and Sylvester Stallone as special ambassadors for Hollywood.
It is unclear how tariffs will be applied to movies that are intangible goods and how they will be evaluated for the purpose of collecting tariffs. It is unclear whether it will only target foreign films or include films produced by Hollywood studios, shot abroad, and worked on them later abroad. It is also unknown whether it will apply to films that have already been shot but have not yet been released, or only to new films.
In the past, many high-budget Hollywood movies were shot mostly outside the United States. The 2009 film Avatar, one of the biggest box office hits in the U.S., was filmed mainly in New Zealand, while the Avengers End game was set in various overseas regions, including Scotland.
Irene Gardiner, chairman of the New Zealand Film Producers Association, said it is confusing whether President Trump’s remarks refer only to foreign films or include American films shot abroad. New Zealand has been used as a filming location for several U.S. movies, including the Lord of the Rings trilogy and the Hobbit trilogy, due to its beautiful natural scenery and low labor and production costs compared to the U.S.
In Australia, the Australian Filmmakers’ Association (SPA), a lobbying group representing more than 750 companies, said, “The need for the government to quickly build a resilient industry that can withstand such a global shock has increased.”
Prior to President Trump’s move, China also reduced the number of Hollywood movies allowed in the country last month as a retaliatory measure against Trump’s tariffs on China. The Chinese Film Directorate said in April that the move would “deteriorate the favorability of Chinese audiences toward American movies.”
The U.S. film industry is the most influential in the world, but foreign films, including the Korean film Parasite, have grown in popularity in recent years.
The American Film Association (MPA) said the film and TV industry created about 2.3 million jobs in the U.S. in 2023.
The U.S. film and TV industry has shrunk in recent years for a number of reasons. According to FilmLA, an American film industry research organization cited by CNBC, Hollywood studios’ film and TV program production has declined by nearly 40 percent over the past decade.
On the other hand, governments around the world, including New Zealand, Canada, the U.K., and Australia, are providing various tax credits and cash refunds to attract film production at lower labor costs than the U.S. According to Ampere Analysis, a total of $248 billion is expected to be invested in the production of Contents worldwide this year.
U.S. media companies are cutting spending to increase profits by shifting from traditional TVs to streaming services. Streaming services are expanding their businesses worldwide, increasing film production targeting overseas markets. However, the White House said that President Donald Trump’s policy to impose a 100% tariff on foreign films has not been made yet. It came only a day after President Trump made his announcement. On the 5th, the White House made the statement in the name of spokesperson Kush Desai to USA Today and Hollywood Reporters.
The White House said, “The government is reviewing all options to achieve the president’s directives to make Hollywood great again and protect the nation’s national and economic security of the United States.”
In a day, the White House is somewhat backward compared to President Trump’s existing policies, which could lead to confusion over how movie tariffs will be implemented in the future.
On the previous day, President Trump announced on his social media (SNS) Truth Social that “the U.S. film industry is rapidly declining,” adding, “I ordered the Commerce Department and the Trade Representative (USTR) to apply 100% tariffs to all foreign films.”
In response, Secretary of Commerce Howard Rutnick responded to X by saying, “We’re working on it.”
However, President Trump did not mention the specific scope of the tariff, such as whether online video services (OTT) are also included.
Meanwhile, when asked about foreign film tariffs at a sports-related event at the White House, President Trump said, “I will meet with film industry officials,” and stressed, “I will restore the glory of the U.S. film industry.”
The U.S. film industry is rapidly losing competitiveness due to rising production costs caused by soaring labor costs. According to the International Alliance of Theatre Production Workers (IATSE), about 18,000 full-time movie-related jobs have been created in California alone over the past three years.
SAM KIM
US ASIA JOURNAL
