Why Trump’s ‘100% Tariff’ Proposal for Foreign Films Doesn’t Make Sense

“The Movie Industry in America is DYING a very fast death,” President Donald Trump posted on his social platform Truth Social on Sunday night. “Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States. Hollywood, and many other areas within the U.S.A., are being devastated. This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda! Therefore, I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN!”

Commerce Secretary Howard Lutnick responded on X: “We’re on it.”

But experts tell TIME that it’s not clear how such a policy would work or who would be charged such a tariff.

“I know it’s not the U.S. government or the President’s job to understand how movies are made,” says entertainment consultant Kathryn Arnold, “but if you understand how complex and interconnected the global film market is—both on a production and a distribution level—it’s devastating and doesn’t make any sense.”

While the President identified a real problem—the U.S. film industry has indeed suffered as production increasingly moves overseas—experts agree that Trump’s seemingly favorite policy tool, tariffs, isn’t really an applicable solution.

Trump’s global trade war thus far has involved slapping levies on foreign goods, for which the U.S. is a net-importer. But foreign films are intellectual property and part of the global trade of services, for which the U.S. is actually a net-exporter.

“The operating theory that the Trump Administration seems to be embracing is that if they make foreign manufacturing more appealing for any part of American industry, it will result in domestic manufacturing improving. So if there are tariffs on anything foreign, it’s supposed to inspire manufacturing domestically,” says Tom Nunan, a continuing lecturer at the School of Theater, Film and Television at University of California, Los Angeles (UCLA). “It was predictable that it would turn to entertainment as well.”

“If it’s cost-prohibitive to produce motion pictures and episodic television, or to acquire motion pictures or episodic television from foreign territories, then it would stand to reason, at least from his Administration’s standpoint, that foreign production would return to the United States. I think that’s the operating theory, at least,” says Nunan, adding however that “it’s not black or white like that.”

Speaking to reporters outside the White House on Sunday night, Trump said: “other nations have been stealing the moviemaking capabilities from the United States.” Trump added that he has done “very strong research” over the past week and that “Hollywood is being destroyed” and “if they’re not willing to make a movie inside the United States, then we should have a tariff on movies that come in.”

While Hollywood has seen a decline in production in recent years, in part due to rising labor costs, Arnold tells TIME that one way Trump could actually try to reverse that trend is by offering incentives, such as tax credits, for shooting in the U.S., which some foreign countries and cities already do as well as several U.S. states. But that would only impact one aspect of filmmaking, and some films shoot across multiple locations. Arnold added that many films are also co-produced by multiple production companies across countries.

Offering an incentive for specific aspects of production would be much more straightforward than trying to determine whether a film is “American” or “foreign” in order to penalize the latter.

The Office of the U.S. Trade Representative has said that although services are not subject to tariffs, they can be subject to trade barriers like regulatory requirements. But when it comes to film and entertainment, imposing certain restrictions can lead to a dramatically less free media environment within the country. 

In China, foreign films—defined as any film not produced by domestically licensed production companies, which can have no more than a 49% foreign partnership stake—are subject to strict censorship and quotas, which require going through state-run distributors. And in response to Trump’s recent tariffs against the country’s goods, the Chinese government announced it would “moderately reduce” the quota of U.S. movies allowed into its massive but tightly controlled market.

There’s also the risk that other countries would retaliate to a foreign-film tariff. And with the film industry being one of America’s strongest service-sector exports—according to the latest Motion Picture Association economic impact report, from 2023, it “generated a positive balance of trade in every major market in the world” for the U.S.—Center for Strategic and International Studies economic adviser and former president of the National Foreign Trade Council William Reinsch told Reuters: “We have a lot more to lose than to gain.”