The idea of the Hollywood tariffs that U.S. President Donald Trump wants to apply to non-American-made movies is clear. Their implementation is difficult. Plus, suggesting federal incentives to a DOGE (or Department of Government Efficiency)-inspired president is impractical. And then there’s the fact that all this is still being done despite the realization that Hollywood generates a $15 billion a year surplus for the U.S.
Now, the first hurdle is determining what an “American” movie is, but this part could be made relatively simple by applying the point system widely used by many countries to qualify for subsidies. The point system could determine the American production level. If it’s 50 percent, a similar tariff would be imposed. If the foreign component is 70 percent, the same percentage could be the import tax. If the foreign element is 100 percent, the tariff will reach its maximum level.
Now the question is: How can an IP’s value be determined? The value of a movie depends on what the buyer is willing to pay. So, does that mean that a tariff on a movie could be priced based on what the first buyer is willing to pay? If a piece of IP could be equated to a tangible item, like a car, a second-hand sale is not subject to tariffs, only to a sales tax. Therefore, a sale to a second buyer (for a second window) would not be subject to an entry tariff. In this case, a producer of a non-American movie could arrange a first sale for $1 to an agent, and pay $1 in tariffs if the movie is 100 percent foreign.
Naturally, the U.S. Customs and Border Protection office that collets import taxes at ports of entry could demand that the importing U.S. film agent pay the tariff at retail price (not wholesale value as is normally the case for imported goods).
Commented Mario Niccolo Messina, founder and CEO of Los Angeles-based Insurgence Entertainment, “It would be absurd to deny that American cinema is in deep crisis. Bold or misguided, this proposal finally puts film at the heart of the political debate — exactly where it belongs. For decades, Hollywood has been America’s stronghold; today, that position is no longer guaranteed. I’m not sure how practical or enforceable a 100 percent tariff on overseas productions would be, but if it passes, we’ll simply adapt by shifting our shoots back onto U.S. soil.”
Explained Chevonne O’Shaughnessy, president of ACI | ACI Inspires from Los Angeles: “In one way the tariffs help me as a producer as I’m making all my movies and series in the U.S. However, the tariffs will also hurt me as I sell movies, and the retaliatory response will make it harder to sell to the international market.”
Added Chris Philip, executive producer of two current international productions, Sherlock and Daughter and Departure, who works out of Miami Beach, Florida: “Building a substantial U.S. varied tax incentive infrastructure across the country would have been a good idea before shocking an already affected industry. Forcing creative decisions to accommodate a U.S. TV market, which has become less attractive over recent years for international productions, simply won’t work. These proposed tariffs will trigger more piracy and affect viewers the most.”
Remarked former Universal Studios executive Blair Westlake, “My bet: This [tariff] dies in the coming weeks from a lack of consensus.”
Concluded Anthony D. Friscia, a former Hollywood studio executive, who now works as an entertainment consultant: “The Trump administration’s tariff proposal on films is never going to happen. An IP is not a physical good. Only physical goods are subject to tariffs. The U.S. film industry is one of the very few industries that runs a financial surplus to the U.S. Why blow that? When President Trump and his tariff people meet with industry heads, this whole tariff thing will be dropped. Trump will save face by saying he was trying to “save” the U.S. film industry because he wanted to make the American Film Industry Great Again (MAFIGA). The End.”
Pictured above from l. to r.: O’Shaughnessy, Westlake, Messina, and Philip
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