President Donald Trump has proposed a dramatic plan to rescue what he calls a collapsing American film industry. At the center of his proposal is a 100 percent tariff on movies produced outside the United States. Trump says this will stop the flow of filmmaking jobs overseas and bring Hollywood back to its former glory. But critics are warning that the idea could backfire, putting more pressure on an industry already struggling after strikes, content slowdowns, and global competition.
A Multibillion-Dollar Industry in Trouble
Hollywood has long been one of America’s most powerful exports, both culturally and economically. In 2023, the United States ran a $15.3 billion trade surplus in movies and TV programming, according to the Motion Picture Association. Data from the Bureau of Economic Analysis showed $22.6 billion in film and TV exports, compared to $7.2 billion in imports.
But while the U.S. dominates global box offices, American-based productions are slipping. Studios are increasingly filming abroad to take advantage of foreign tax breaks and cheaper labor. Production in the U.S. on movies with budgets over $40 million fell 26 percent between 2021 and 2023. At the same time, spending on productions rose in Canada and the United Kingdom. Hollywood insiders are warning that if this trend continues, thousands of American jobs will be lost.
“This is a very serious issue,” said film producer Steven Paul. “We’ve spent months meeting with top leaders across the film and television industry, and there is broad agreement that runaway production has become a serious issue that needs to be addressed now.”
Trump echoed this concern in a Truth Social post on May 4. “The Movie Industry in America is DYING a very fast death,” he wrote. “Other countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States.”
A 100 Percent Tariff on Foreign Films
To fight back, Trump says he has authorized the Department of Commerce and the United States Trade Representative to begin implementing a 100 percent tariff on all movies produced in foreign countries. “WE WANT MOVIES MADE IN AMERICA, AGAIN!” he posted.
Speaking to reporters at the White House, Trump declared, “Our film industry has been decimated. It has abandoned the USA.” He promised to meet with industry leaders before making final decisions, saying, “We want to make sure they’re happy with it because we are all about jobs.”
Trump has also named three longtime allies in the entertainment industry—Jon Voight, Mel Gibson, and Sylvester Stallone—as his “Special Ambassadors” to Hollywood. Voight and his advisor, Steven Paul, recently presented a proposal to Trump that includes not just tariffs but also federal tax incentives, job training programs, and subsidies for theaters and post-production facilities. Their goal is to make producing films in the U.S. more competitive and attractive for studios.
“The President loves the entertainment business and this country, and he will help us make Hollywood great again,” Voight said. Paul added, “It’s essential that we preserve America’s leadership in film and television production.”
Financial Stakes Are High
The financial implications of Trump’s plan are massive. If tariffs were applied broadly, foreign-made films could become much more expensive to distribute in the U.S. That might drive studios to keep productions domestic, but it could also raise costs for companies and consumers.
Investors were quick to react. Shares in entertainment giants like Netflix, Disney, Warner Bros. Discovery, and Paramount fell more than 2 percent when news of the tariff plan broke. Barclays analysts warned that “if this is deployed on a wide scale, it may end up harming the very industry it is supposed to help.”
One entertainment executive told CNN, “On first blush, it’s shocking and would represent a virtually complete halt of production. But in reality, he has no jurisdiction to do this and it’s too complex to enforce.”
Jay Sures, vice chairman of United Talent Agency, said the industry would prefer to stay in the U.S., but the cost structure makes it difficult. “It’s cheaper for Hollywood studios to pay for everyone to get on planes, pay for hotels, because the cost of labor, lack of rebates, and the ability to make things overseas is infinitely cheaper,” he said. Sures added, “A blanket tariff has the ability to bring the movie business to a standstill, which is the last thing Hollywood needs after dual strikes and a content recession.”
How Would It Even Work?
One of the biggest questions surrounding Trump’s plan is how it would actually be implemented. Unlike goods, movies are a form of intellectual property and are often streamed or digitally distributed. Critics say it would be nearly impossible to determine how much of a film is foreign-made, especially for productions that use international crews or are filmed partly in other countries.
“There’s no way this could even work,” said political strategist Garry South. “How do you slap a tariff on movies watched online? What if a movie has only one or two scenes filmed abroad?”
South argued that Trump’s approach shows a lack of understanding about both economics and modern film production. “Having Trump prescribe tariffs is like having your next-door neighbor, who’s not a doctor, prescribe your medications,” he said.
Some insiders also suspect Trump’s motives. One executive asked, “Is he trolling us because we didn’t vote for him?”
Newsom Offers a $7.5 Billion Plan
While Trump is proposing tariffs to fight runaway production, California Governor Gavin Newsom has offered to work with him. Newsom has proposed a $7.5 billion package of state-level tax incentives aimed at keeping film and television production in California. His plan would expand existing programs that offer rebates for productions that film in the state and hire local crews.
Newsom’s plan is backed by many in the industry who argue that positive incentives are more effective than punitive measures. The program would offer grants, improve soundstage infrastructure, and provide financial assistance to theaters still recovering from the pandemic shutdowns.
A White House spokesperson acknowledged the two plans, stating, “The Administration is exploring all options to deliver on President Trump’s directive to safeguard our country’s national and economic security while Making Hollywood Great Again.”
For now, Trump’s plan is not finalized. White House officials say they are meeting with leaders from unions, studios, and streaming services to weigh the options. Commerce Secretary Howard Lutnick confirmed the administration is actively reviewing how the tariff could be structured, saying on X, “We’re on it.”
Some observers believe the tariff threat is part of Trump’s broader negotiating strategy. Doug Heye, a Republican strategist, told The Hill, “He’s trying to get people to pay attention. That’s it.”
Whether Trump’s idea becomes law or not, it has opened a major debate about the future of the American film industry. The stakes are enormous. If Hollywood can’t compete globally, the U.S. risks losing not only jobs, but its position as the cultural leader of the world’s entertainment market.
