Anatomy of a Film Tariff: Trump’s Proposed Movie Tariffs Cast a Shadow on Cannes

As the international Cannes Film Festival kicks off today, films selected from more than 150 countries mark a record number for the renowned cultural event. But alongside the glamor of global filmmakers and movie stars, geopolitical tensions course through the red carpet against a backdrop of overseas threats from the United States on stamping tariffs on foreign film.

Just over a week before the opening of Cannes, U.S. President Donald Trump announced in a social media post on May 4 that—after Mar-a-Lago talks with actor and advisor Jon Voight—he intended to place 100 percent tariffs on “any and all Movies coming into our Country that are produced in Foreign Lands,” citing them as a threat to national security and a dying Hollywood.

Questions arose immediately. Would tariffs be applied retroactively? How would they affect U.S. films that shot scenes overseas? Met with panic and concern, the White House seemed to walk the president's statement back by saying they were exploring ways to “Make Hollywood Great Again,” but declined to offer specifics. 

These would be the first tariffs applied to a service, economic experts tell CFR, which can be more complicated than issuing tariffs on goods. As film has become one of the most globalized industries on Earth, it is becoming harder to discern what “made in America” means for a movie. With other industries facing a wave of tariffs, film getting put under the economic spotlight is a first that some worry could pose a threat to the arts. 

Is Hollywood really ‘dying’?

The past few years have been trying times in Hollywood, as the U.S. filmmaking hub was hit especially hard by the COVID-19 pandemic in 2020, guild strikes in 2023, and the Los Angeles fires earlier this year. Despite these setbacks, the industry could be on the precipice of recovery: Domestic revenue from U.S. films is up nearly 16 percent this year as compared to last year, though it is still lagging behind pre-pandemic numbers of around 31 percent.

But actual camera-rolling within the United States—and Los Angeles in particular—has declined. More filmmakers are going abroad to shoot because, much like most U.S. products, making films is significantly cheaper overseas. (The quintessentially American “Barbie” movie was almost entirely filmed in the United Kingdom, for one.) As a result, middle-class jobs in the U.S. film industry are dwindling; around 18,000 full-time roles have disappeared in the last three years.

Is there global competition for movies? 

Unlike some other sectors that have been knocked with tariffs, American entertainment has a large trade surplus with the world. According to U.S.-based Motion Picture Association data, American films garnered $22.6 billion in exports as well as a $15.3 billion trade surplus in 2023. Yet over the years, other governments—such as Australia, Hungary, New Zealand, and the United Kingdom (UK)—have unveiled tax credits and cash rebates to entice film productions. The potential tariffs aim to counter these incentives, but analysts say that they’re instead likely to cause Hollywood filming to decline. They argue that it will still cost more to film domestically than it would in a world without tariffs.   

China, which has been the primary target of Trump’s trade war, is the second-biggest market for movies worldwide. However, the competition is not one-to-one: In recent years, China’s domestic cinema has outperformed American imports, and conversely, the vast majority of Chinese movies make most of their revenue at home, not in the United States. To increase its domestic profits, China recently said it would limit Hollywood films within its borders. 

But the rationale underlying the tariffs is ignoring a wider trend: “Declines in production volume over the past eighteen months are not a U.S.-only phenomenon, but a global one,” according to British market research firm Ampere Analysis. In other words, implementing protectionist trade policies on a declining industry won’t necessarily increase production.

What would an import tax mean for film consumption?

Film industry representatives and economists alike have largely criticized the idea of movie tariffs. They argue it will be far more expensive to sell to the U.S. market, will drive up U.S. production costs and ticket prices, and that the current overseas investment setup has yielded dually beneficial returns for Hollywood and other country partners. 

Ampere predicts that $248 billion will be spent globally in 2025 to produce entertainment content. If tariffs come onto the scene, this already in-flux number could become even more volatile—which Hollywood wouldn’t escape from. A better tactic, they say, would be to create incentives to film inside the United States. 

A foreign film tax could also make accessing world movies within the United States prohibitively expensive for large swaths of the population. Multiple analysts have noted that the audience loses in the tariff war, with consumers paying more for what could become a creatively narrower landscape. If they can’t afford entertainment amid a raft of other tariffs squeezing the economy, Americans will be cut off from potential information sources and the myriad benefits of international content.

“Bringing [global] art and people together is a critical mission,” even in the face of political adversaries, Glenn Lowry, director of the Museum of Modern Art, said at a CFR event. Other cuts to programs in the arts, he worries, will cause more and more creative exchanges to disappear. “This isn’t to anyone’s advantage,” Lowry says. 

Meanwhile, international films are growing in popularity, shaping and informing U.S. cultural conversations, says film experts, including Miami University film professor Kerry Hegarty. Movies like last year’s Israeli-Palestinian Oscar documentary winner “No Other Land” depict current issues while others, such as 2023 U.S.-UK-Polish collective “The Zone of Interest,” bring attention to moments in history. Others still, like 2019’s Korean film “Parasite,” simply add value to society for intrinsic cultural exchange, Hegarty adds.

Losing these films poses a threat to communication. “Film and television production is increasingly part of an interconnected global system,” says Mark David Ryan, film professor at the Queensland University of Technology. It also raises concerns that films seeking to tell international stories will have to resort to only U.S.-based crew and locales, which limits their authenticity, and in some cases, provokes questions about the ethics of disseminating stories that leave out crucial voices. 

Could they affect geopolitics?

Several foreign governments and film industry spokespeople have vocalized concerns that the tariffs would decimate their local film sectors, and have already pledged to protect their film industries. This could include placing tariffs on American films, making it harder for them to profit overseas. That would dent the very industry Trump is trying to save: Ampere estimates that 54 percent of U.S.-made movies’ box office earnings come from abroad. 

Tariffs could also damage countries’ relationships with the United States and reduce U.S. presence at international film festivals like Cannes, which is only growing in popularity and country diversity. Conversely, they could also diminish diversity at U.S. gatherings such as the Academy Awards. These effects could be seen as soon as next year.

“The United States has long argued that Canada, China, and France should lift their limits on the broadcast of U.S. films, so the suggested tariff on foreign films is a major change of direction for U.S. trade policy,” says CFR trade expert Brad W. Setser.

Collaboration on the arts is “a vital activity” for their longevity, Lowry says. U.S. film has soft power for this reason, too: If international films vanish from U.S. screens—and U.S. films disappear from foreign ones—it could reduce global willingness to cooperate with Washington on other matters. The extension of the tariff war into Hollywood seems poised to potentially deepen distrust of the White House. 

Brad W. Setser and Will Merrow contributed to the graphic for this In Brief.