Trump is trying to save "dying Hollywood" with tariffs. Analysis

US President Donald Trump believes that the American film industry is dying. In his opinion, only protectionism can save the situation. Therefore, he wants to introduce one hundred percent tariffs for foreign films. How justified this step is and what it can lead to is described in the Izvestia article.

What does Trump want

• Trump is confident that the film industry in America is "dying very quickly." According to him, this is happening because other states are actively luring American specialists. Moreover, according to the head of state, they do it in a coordinated manner. As a result, many US states, including California, where Hollywood is located, are going bankrupt. Trump called this situation a threat to national security, and therefore authorized the Ministry of Commerce and the country's trade representative to "begin the process of introducing a 100 percent tariff" on all foreign films coming to the United States. He is confident that in the struggle for the American market, cinematographers will move production to the United States.

• Film critics are skeptical about Trump's words about "dying" Hollywood, as this statement has little to do with reality. Some American directors shoot films in the EU, saving a lot of money. However, this does not affect the artistic level of these films in any way.

• Trump has long expressed his concern that American filmmaking is often being moved abroad. Shortly before taking office, he invited actors Mel Gibson, John Voight and Sylvester Stallone as his "special envoys" in Hollywood, who were to become his "eyes and ears." However, this appointment did not produce any real results.

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• It is not yet clear exactly how the fee can be collected, as it often involves cross-border production. However, it is unclear whether Trump's measures will affect streaming services or just film distribution. The difficulty also lies in the fact that films are not commodities, they are intellectual property, and therefore they are not subject to tariffs.

Reactions and forecasts

• Australia, where several Marvel superhero films were shot, and New Zealand, whose landscapes became the setting for the films "The Lord of the Rings" and "The Hobbit," have already announced that they will defend their cinema. The British Bectu Union also called on the government to take immediate measures to protect the country's "vital" industry.

Ampere Analysis predicts that in 2025, $248 billion will be spent worldwide on the production of various content. Therefore, governments around the world will continue to increase subsidies to the film industry or improve conditions for professionals in this field in order to attract producers to their countries.

Does Hollywood have a problem

• Although Trump's statement about the impending death of the American film industry is far from the truth, there is indeed a decline in key indicators and the transfer of production to other countries. So, according to ProdPro, in 2023, about half of the expenses of American producers on film and television projects with a budget of more than $40 million were spent outside the United States. At the same time, American film production in 2024 decreased by 26% compared to 2021. California became only the sixth most popular location for filming in the next two years, behind Canada, the United Kingdom, Central Europe and Australia. According to FilmLA, the production of films and TV shows in Los Angeles has decreased by almost 40% over the past decade.

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• There are several reasons for such abbreviations. First of all, in order to save money on production, American studios do often make films in countries with tax benefits. In particular, we are talking about neighboring Canada, as well as Great Britain, Hungary, Australia, New Zealand or Germany.

• The rapid decline in the production of the American film industry was also influenced by the proliferation of streaming platforms. So, in 2018, box office receipts reached almost $12 billion. However, in 2020, they decreased to $2 billion. At the same time, the number of films released on the screens has decreased by half compared to 2019.

• A few years ago, the work of cinematography in the United States was hampered by restrictions related to COVID-19. It was then that the box office of films began to decline sharply, and the viewer began to get used to watching movies at home. Also, forest fires in California periodically contribute to the evacuation of the population.

• Then, in 2023, the screenwriters and Film Actors guilds went on strike. It lasted from May to September, and more than 10 thousand specialists participated in it. The participants demanded higher salaries, including increased deductions for showing films on streaming services, as well as restrictions on the use of AI. With great difficulty, the protesters were able to reach a compromise with the Alliance of Film and Television Producers. Most of the demands of the rally participants were met. However, due to this strike, some companies had to postpone the release of their projects.

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How Trump's tariffs will affect cinema

• Trump's words have already influenced American studios. At the beginning of trading on May 5, shares of the American streaming service Netflix fell by 4%, Walt Disney — by 3%, and Warner Bros Discovery — by 5%. By the end of the day, the drop was recouped, but in general, some brokers reported negative forecasts in the near future.

• If countries impose tariffs in retaliation, there is a risk that some Hollywood studios will fall into disrepair. After all, most high-budget films receive the bulk of their income abroad.

• There are almost no foreign films in the top 20 of the US box office. So Trump's initiative is declarative in nature, and does not seek to protect the industry from foreign films flooding the cinema. As a result, the fees will only reduce the number of films in the cinema repertoire.

• In addition, the duties are unlikely to encourage the film industry to return to the United States. Most likely, film companies will still focus on more favorable conditions for filming. Against the background of Trump's restrictions, other countries will surely provide even more benefits for foreign cinema. Hollywood producers and unions have already called on California Governor Gavin Newsom to increase the state's tax breaks in order to better compete with other companies.

When writing the material, Izvestia talked and took into account the opinions of:

• Sergei Sychev, film critic and columnist for Izvestia;
• film criticism by Alexander Shpagin;
• David Schneiderov's film criticism.