President Trump and the US government’s plan to implement 100 per cent tariffs on internationally produced films would be fraught with difficulty, and applying traditional goods-based tariffs to digitally streamed content appears “legally questionable and logistically nightmarish”, according to one industry analyst.
Tom Morrod, research director and co-founder of Caretta Research, tells TVBEurope the potential for retaliatory tariffs could pose “a serious threat to the significant US audiovisual export market”.
“Consequently, the prevailing view is that targeted federal incentives offer a far more constructive and less damaging approach to bolstering domestic production than potentially counterproductive tariffs,” he states.
There is confusion within the industry as to what Trump means by “films”, with many asking if he intends to include movies produced by the global streaming services. “It might push more content to be classified as TV, to avoid theatrical distribution and go direct to SVoD where it’s not possible to attribute a defined value to the sale of an individual asset (thereby pushing more content to streaming release over theatrical release),” says Morrod.
He suggests an alternative to the tariffs is taxing any localised benefits for production, VFX or post production offered by other countries. “But even then, it’s hard to see how these would be accounted for and how they would be taxed in the US as they are often funnelled through complex production subsidiaries.”
Morrod adds that the original 100 per cent tariff could be scaled back due to industry backlash since Trump posted the idea on his social network on Sunday evening, especially with the emergence of Jon Voight’s (one of Trump’s Hollywood ambassadors) alternative plan, which focuses more on incentives.
“However, the administration’s protectionist stance means some form of trade action or pressure remains a distinct possibility, perhaps more targeted than the initial blanket proposal. It’s equally likely that this is intended as a bargaining chip in future trade negotiations, or a covert attempt to censor content coming into the US.”
The impact on the UK/European film and TV sector could be severe, warns Morrod, with both regions leveraging strong infrastructure, skilled freelance workforces, and attractive incentives. “Tariffs threaten this ecosystem directly, potentially causing significant job losses, particularly among freelancers, and deterring the inward investment they rely on. The risk of retaliatory measures damaging US film exports back into these key markets is also a major concern,” he says.
The post production sector, which has been under strain in recent months with the closure of Technicolor et al, could also be hit by the uncertainty around the impact of the tariffs. “Defining where a film is ‘produced’ when post production happens across multiple territories adds another layer of complexity,” Morrod adds.
“As for US capacity, it’s doubtful Hollywood could seamlessly absorb a massive, immediate shift back to domestic production. Costs are significantly higher stateside, and despite state-level incentives, ‘runaway production’ persists precisely because key infrastructure and specialised labour pools are well-established abroad. Ramping up domestic capacity to meet a sudden surge would be a major challenge.”
