Trump Announces 100% Tariff on Foreign Movies, Citing National Security Threat

WASHINGTON, May 5, 2025 — U.S. President Donald Trump on Sunday announced a sweeping 100% tariff on films produced outside the United States, calling foreign incentives for filmmakers a "national security threat" and claiming they were driving the American movie industry toward a "very fast death."

Trump made the declaration on Truth Social, stating that countries offering tax credits and financial incentives to attract filmmakers were intentionally undermining the domestic film industry. He emphasized that the tariff would apply to all films produced abroad and imported into the United States, but provided few details on how the policy would be implemented.

"This is a concerted effort by other nations and, therefore, a national security threat. It is, in addition to everything else, messaging and propaganda," Trump said, adding, "WE WANT MOVIES MADE IN AMERICA, AGAIN!"

While Commerce Secretary Howard Lutnick confirmed on X (formerly Twitter) that the administration was "on it," questions about the logistics of the tariff remained unanswered. It was unclear whether the measure would affect films distributed on streaming platforms, theatrical releases, or both. Hollywood executives spent Sunday night scrambling to understand the full impact, with the Motion Picture Association, which represents major studios, offering no immediate comment.

The announcement follows years of rising foreign competition in film production, with countries such as Canada, the U.K., Australia, and New Zealand ramping up their efforts to attract U.S.-based filmmakers through tax rebates, credits, and other financial incentives. In 2025, global spending on production is expected to exceed $248 billion, according to Ampere Analysis, with a significant portion of that budget flowing to overseas shoots.

In January, Trump appointed Hollywood veterans Jon Voight, Sylvester Stallone, and Mel Gibson to a newly formed committee tasked with revitalizing the American film industry. Trump has previously suggested that Hollywood’s decline could be reversed through greater government intervention and reforms to existing policies.

A Struggling Industry

The U.S. film industry has long faced a shift toward foreign production locations, driven by incentives that make it cheaper to film abroad. Major media companies, including Walt Disney, Netflix, and Universal Pictures, regularly film in countries like Canada and the U.K., which offer more favorable terms than U.S. states like California, where high production costs and local taxation have stifled growth.

Figures from ProdPro, a research firm that tracks industry spending, show that U.S. producers spent about 50% of their movie and TV budgets outside the U.S. in 2023. Hollywood, once the heart of global film production, has seen its dominance fade over the past decade, with Los Angeles experiencing a nearly 40% drop in film production, according to data from FilmLA, a nonprofit that tracks the region's output.

“Retaliation will kill our industry,” warned William Reinsch, a former senior Commerce Department official, now a senior fellow at the Center for Strategic and International Studies. He argued that if countries retaliated by imposing tariffs or restrictions on American films, it could devastate U.S. studios. "We have a lot more to lose than to gain," Reinsch added. "It’s difficult to make a case for national security based on movies."

Concerns Over Retaliation

While the U.S. has been seeking to push back against global trade imbalances, Trump's move has drawn sharp criticism from foreign governments. Leaders in Australia and New Zealand, where U.S. films like The Lord of the Rings and Marvel superhero movies are regularly shot, responded swiftly to the announcement, pledging to defend their local industries. Both countries have used film incentives to bolster their economies, and they expressed concerns that the new tariff would harm these efforts.

California, which has seen film production decline due to competition from overseas, may be particularly hard-hit. Despite Hollywood's storied history, the state is facing challenges from cities like Toronto, Vancouver, and London, which are rapidly becoming preferred filming locations. A 2023 survey of Hollywood executives found California to be the sixth most favored destination for film production in the next two years, behind several international markets.

The Future of Hollywood

In addition to foreign competition, the ongoing effects of California’s natural disasters, such as the January wildfires, have also prompted filmmakers to look elsewhere for stable, cost-effective filming options. This trend has left workers in Hollywood, from costume designers to technicians, concerned that their jobs may soon move elsewhere.

Hollywood labor unions have urged California Governor Gavin Newsom to bolster the state’s film incentives to compete with international offers. In particular, there have been calls to increase tax rebates and streamline the permitting process for film projects.

Trump’s latest move is part of a broader pattern of trade conflicts under his administration, many of which have sparked fears of retaliatory actions that could further disrupt global markets. With uncertainty clouding the U.S. film industry’s future, it remains to be seen how the proposed tariffs will impact Hollywood’s ability to compete on the world stage.

As of now, the industry waits for further clarification on the new tariff structure and its long-term consequences. For many filmmakers, producers, and studio executives, the uncertainty is just as concerning as the policy itself.

The retaliation will kill our industry. We have a lot more to lose than to gain.