Trump’s screen tariff plan might be his wildest yet

Wednesday, 7 May 2025

President Donald Trump announced via social media that films made outside the US will be slapped with a 100% tariff.

ANALYSIS: An air of widespread confusion has blanketed New Zealand’s screen sector after United States president Donald Trump’s abrupt, simplistic and thin-on-detail comments around imposing a tariff on films not produced in America.

Trump, who seems motivated to bring back screen work in-house to languishing Hollywood and the rest of the United States, agitatedly wrote that America’s screen industry was “DYING a very fast death”, according to a post on social media platform Truth Social on Sunday night (US time).

He has his eye on US productions that decide to shoot or produce their screen projects either wholly or in part offshore due to a mix of financial and other reasons. Trump said he’d instructed officials to “immediately begin” implementing a 100% tariff on films coming into the US that are produced in other countries, writing, “WE WANT MOVIES MADE IN AMERICA, AGAIN!”

On Tuesday screen insiders had a range of views on the matter, saying they weren’t sure if a tariff could even be imposed on films under international law, how it would be calculated, what exact productions it would apply to and whether the proposal would include television series, direct-to-streaming service productions, or international co-productions.

Also uncertain is the implications any potential tariff could have not only on New Zealand’s screen industry but more broadly the world. A 100% tariff on US-based producers deciding to shoot offshore would effectively eradicate any chance of those companies choosing other countries to create their projects ‒ certainly independent, low-budget productions would be forced to produce wholly in America.

White House officials later clarified “no final decisions” had been made and that it was “exploring all options”.

Hollywood is hamstrung to some degree by its studio and workforce constraints, in addition to the fact that other states within America offer more competitive tax incentives for productions. While some states don’t offer any incentive, California offers a relatively low 20% tax break for feature projects with a minimum spend of $1 million. To get this, a production must spend 75% of its budget in the state or have a minimum 75% principal photography days in California.

Hollywood’s production level has been languishing for several years as US-based production companies have outsourced work to other countries offering cheaper labour and competitive tax incentives.

While there are other uplifts available to those who choose to produce in California, some other states offer more competitive credits ‒ Illinois (30%), Kentucky (30-35%), Louisiana (up to 40%) and New Jersey (30-35%) to name a few.

New Zealand offers a 20% base rebate for qualifying international productions to shoot or produce here, too, but other countries offer significantly higher amounts, including Canada, the United Kingdom, Australia and countries within Europe.

It’s true that America outsources a lot of its screen work offshore but incentives that countries around the world offer are only a part of the problem.

The United States has significantly higher labour costs than other countries, not to mention a production company may want to work offshore for its own reasons, for instance to shoot in particular landscapes or harness the talent of world-leading screen companies and the genius crews they employ like Wētā FX that are based elsewhere.

California has also been uniquely affected by widespread industrial action, climate change and of course the pandemic in recent years, all factors that have helped to upend local production.

Annie Murray, chief executive of the NZ Film Commission, which is tasked with encouraging inbound production, on Tuesday said it was in the process of speaking with its international partners about what the implications could be. “We’re mindful, however, this is an evolving situation and it’s too early to speculate on what this could mean,” she told The Post.

Annie Murray, the chief executive of the Film Commission, says it is in the process of speaking with its international partners about what the implications could be.

New Zealand's film sector generates NZ$3.5 billion annually ‒ around one third of that revenue is generated from the United States, according to the Ministry of Foreign Affairs and Trade.

Sir Richard Taylor, co-founder of world-leading creative services company Wētā Workshop, declined to comment, and other leading industry voices, including Sir Peter Jackson and US transplant James Cameron, have also kept quiet on their stance, for now, as has Wētā FX, which all stand to be significantly impacted if the proposal goes ahead.

The Government equally seems as astonished and dumbfounded. Economic Growth Minister Nicola Willis on Tuesday morning said she’d be “disappointed” if the decision ended up holding the local industry back. “It’s been a wonderful source of great jobs, of development, it’s been an important industry and New Zealand is the best place in the world to make films. We have incredible talent, incredible landscape, and I want to see that industry continue to grow.”

Arts Minister Paul Goldsmith also described the proposal as “concerning”, but said more detail was needed to know what exactly it was dealing with, adding the Government was asking officials for advice. “The film industry is very important economically as well as culturally … We’re very much in favour of the current regime,” he said on Tuesday.

It is difficult to imagine US studios being supportive of Trump’s idea as it would ultimately limit options and increase production costs for them, not to mention the fact left-leaning California Governor Gavin Newsom has open conflict with Trump (the former is suing the latter).

Irene Gardiner, president of the Screen Production and Developers’ Association, said there were better ways to solve the issue of Hollywood’s production downturn, for example increasing California’s incentives ‒ something Newsom has floated the idea of ‒ or introducing a national scheme that takes over the current state-by-state model.

Finance Minister Nicola Willis says she’d be disappointed if the plan went ahead.

Gardiner said if the seismic proposal went ahead it would be “really terrible” and “devastating” for New Zealand, and acknowledged that local screen workers would be frightened. Significantly fewer American productions means less flow-on money for tourism, hospitality, transport, accommodation and other industries that work to support screen.

However it could also open the door for our screen portfolio to wildly diversify, either by increasing the amount of domestic work we produce or filling the gap with screen productions from other countries. Prime Minister Christopher Luxon was recently in India and met with Bollywood executives on a trade mission.

The proposal was a reminder to keep our domestic screen industry, which had less variability and vagary, as strong as possible, Gardiner said, so it could stay afloat and ride out any downturn of international productions that may or may not come.

Tui Ruwhiu, an independent producer and executive director of the Directors and Editors Guild, said anything slowing down or terminating international production was not good, adding the local industry was equal parts concerned and confused.

Budgets for American studios would have to go up, or labour and costs would have to become more affordable, for American producers to be able to keep up the level of screen work they produce internationally, but only in the US moving forward, Ruwhiu said.

There is also the question of what any tariff could do for international relations in the screen world, and whether it could be imposed on the distribution of foreign-made films in the US, costs which would likely be passed on to the American consumer.

In January Trump appointed US screen veterans Jon Voight, Sylvester Stallone and Mel Gibson to bring Hollywood back “bigger, better and stronger than ever before”. Ironically, Gibson’s long-awaited sequel to The Passion of the Christ, titled The Resurrection of the Christ, will start shooting in August in Rome, Italy ‒ presumably, this too would have to pay the 100% tariff.

John Barnett, a veteran screen producer, said Trump’s proposal hadn’t been thought through and had created total confusion in every corner of the screen world. It would have little positive effect on most pockets of the global industry except for maybe boosting the employment prospects of US screen workers.

Hours after Trump’s chaotic announcement the share value for some of Hollywood’s biggest entertainment companies including Netflix, Disney, Warner Bros Discovery and Paramount dropped by more than 2%.

Experts have also warned tariffs may not be able to be applied to screen projects legally, as unlike manufactured goods, they’re intangible products containing intellectual property, and are not shipped across borders in a way that allows traditional customs enforcement.

Barnett joked the next season of Mike White’s hit HBO series The White Lotus could be filmed in Pennsylvania. “It’s not practical … There is no way the industry will tolerate this kind of imposition,” he said.