With the US President Donald Trump saying he will hit movies made in foreign countries with 100% tariffs to revive “dying” Hollywood, the shocked industry, including major streamers like Netflix, is asking what the threat actually means.
Netflix, the mother of all major streamers, has been enjoying life recently. Its stock was doing fine, and Wall Street saw the company as essentially recession-proof amid concerns that the US economy might begin contracting.
That all changed with one typically loud social media post from President Trump. On Truth Social, he announced plans to impose a 100% tariff on all movies made outside of the US.
“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,” Trump wrote.
“This is a concerted effort by other Nations and, therefore, a National Security threat,” he inexplicably added before also mentioning “propaganda.”
Therefore, Trump wrote, he has instructed his minions to begin working on a 100% tariff “on any and all Movies coming into our Country that are produced in Foreign Lands.”
The logic seems twisted. If forced to cease filming abroad due to much higher costs, American studios won’t do it at home either – the US, especially California, is expensive. That, in turn, means fewer movies made in general.
Netflix could face higher costs
Of course, there are still more questions than answers, so one can only speculate what’s going to happen. Yes, Commerce Secretary Howard Lutnick already responded to Trump on X, saying, “We’re on it.”
We’re on it. https://t.co/r5zCLxZrem
undefined Howard Lutnick (@howardlutnick) May 4, 2025
But on what exactly? For instance, the World Trade Organization has a moratorium on tariffs for digital goods until 2026 – films probably count as such.
Moreover, would the tariffs be based on box office revenue or production costs? Is content on streaming platforms such as Netflix going to be included? What about post-production? Was Trump talking about movies and not TV?
Netflix’s stock price has already begun falling on Monday, and Citigroup analyst Jason Bazinet told The Wrap that the streaming giant could, in a worst-case scenario, face a 20% decline in earnings and an annual cost increase of $ billion.
Currently, Netflix spends around $17 billion per year on content, with 60% of that being original productions and the remaining 40% licensed. Of the original content, half is produced outside the US.
According to Bazinet, the streamer could reduce the impact by raising US prices, cutting back on internationally produced content, or shifting content production to America.
Nevertheless, it would seem we’d have to wait for more details. Plus, as it’s already happened with this administration, Trump may roll back the proposals entirely.
Foreign tax credits lure US studios
Still, the industry is worried – both in America and elsewhere. That’s because there’s a possibility that Trump wants to target US film companies producing films abroad. This is standard practice nowadays.
Deadpool & Wolverine, Wicked, Gladiator II, and the Minecraft Movie were all shot outside America. Franchises like Mission: Impossible also shoot overseas, and Barbie was almost entirely shot in the United Kingdom.
Marvel movies have been filmed in Australia, while New Zealand is, of course, home to The Lord of the Rings franchise. Dune films were shot in Jordan and the United Arab Emirates.
Foreign locations are chosen for several reasons. Some are exciting, beautiful, and not found in the US, as vast as the country is.
But many countries – the UK, Hungary, Canada, and others – also offer tax breaks to American studios to encourage filming in them.
Filming abroad often comes with lower labor costs, too. According to the International Alliance of Theatrical Stage Employees, roughly 18,000 full-time industry jobs have been eliminated in the past three years, primarily in California.
“Films intended for initial release in the US are increasingly being shot overseas — and American workers and our economy are paying the price,” said the organization.
“Foreign governments have successfully lured film and television productions, and the multitude of jobs they create, away from the United States with aggressive tax incentives and subsidies.”
According to the International Alliance of Theatrical Stage Employees, roughly 18,000 full-time industry jobs have been eliminated in the past three years, primarily in California.
Speaking with reporters from the White House on Monday, Trump touched upon precisely this issue, saying that other countries’ financial support for Hollywood films was “sort of a threat to our country in a sense.”
Newsom’s counter offer
If so, California is also part of the problem. The cost of working in the Golden State, producers say, is prohibitive – that’s why other US states like Georgia or Illinois are also luring film production away from Hollywood.
California’s governor, Gavin Newsom, has been pushing for his plan to more than double the state’s film and TV tax incentives to $750 million annually.
After Trump’s statement, Newsom offered to partner with the administration to create a federal film tax credit program worth at least $7.5 billion. “It’s time for a real federal partnership to Make America Film Again,” he said.
California built the film industry — and we’re ready to bring even more jobs home.
undefined Governor Gavin Newsom (@CAgovernor) May 6, 2025
We’ve proven what strong state incentives can do. Now it’s time for a real federal partnership to Make America Film Again.@POTUS, let’s get it done.
Another part of the puzzle is the fact that US tariffs would mean a huge cost increase for those foreign production companies that want to sell to the American market.
Head of media and entertainment trade union Bectu in the UK, Philippa Childs, said in a statement: “These tariffs, coming after Covid and the recent slowdown, could deal a knock-out blow to an industry that is only just recovering and will be really worrying news for tens of thousands of skilled freelancers who make films in the UK.”
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