President Trump has Hollywood scrambling to make sense of his announcement of a 100% tariff on films produced outside the US. The plan has been positioned as a way to revive domestic production and counter foreign incentives. The industry responded promptly with confusion and concern, warning that such tariffs could sharply raise production costs, reduce the number of films made, and hit moviegoers with higher ticket prices. And one question looms large over all current speculation: How? Kim Masters and Matt Belloni seek to answer this question and more in this week’s Banter.
New tariff in town? President Trump’s call for a 100% tariff on foreign-made films has rattled the town, but the bold proclamation appears to stem from a weekend Mar-a-Lago meeting with “special ambassador to Hollywood,” actor John Voight. “The clarification [offered by Voight and his manager Steven Paul] was interesting,” Belloni notes. “They were saying that these quote unquote ‘tariffs’ might be forcing these American companies that benefit from overseas tax credits to essentially hand over that money to the US Treasury… Now, that is not something that has been proposed, it would require Congress to get involved, but that is at least a little bit more clarity.”
Yes (please) in our backyard? California Governor Gavin Newsom responded by urging Trump to partner on a $7.5 billion federal film tax credit, aiming to keep jobs and shoots in the US and counter the lure of international incentives. Studio chiefs argue that reforming California’s own tax credit, recently proposed to jump from $330 million to $750 million, is more urgent than tariffs, as productions are increasingly drawn away by better deals elsewhere. “Production has fallen off a cliff very steeply here in Los Angeles,” Masters says. “California generally has been working — as we discussed recently — to figure out a way to lure production back. A federal incentive, to me… I would be worried. Because what are the odds that they would do that without expecting to control content?”