Why Donald Trump Wants to Levy a Big Tariff on the Film Industry

When William Wyler was prepping Roman Holiday back in the the early 1950’s, he had the idea to shoot the movie in Italy, not on a studio backlot the way nearly all Hollywood films were in those days.

Paramount Pictures resisted, the Italian Ministry of Tourism resisted, pretty much everyone resisted. But Wyler insisted, and that’s how we have Audrey Hepburn and Gregory Peck tearing through the streets of Rome on a Vespa, among many Princess Ann iconic scenes.

Why in the name of the Piazza Navona am I bringing up a movie from nearly three-quarters of a century ago? Because it was in that moment and the moment of Quo Vadis just before it that modern global Hollywood was born. Shooting overseas slowly but surely became a regular thing for U.S. studios, first in Italy, then in England. By the 1990’s both the U.K. and Australia were actively trying to lure productions with incentive packages, and in the 2000’s Hungary, Spain and other European countries were following suit. So much so that we now have the perfect opposite of the Wyler situation: studios and foreign governments are begging for movies to be shot overseas, and directors have to fight if they want to shoot in the U.S.

That is, until Sunday night, when Donald Trump sought to turn back the clock and undo some 75 years of history. Using the blunt instrument of a tariff, he wants to bring us back to those pre-Wylerian times of frequent shooting on Southern California backlots, or at least whatever U.S. state is currently offering the most generous tax incentives.

“The Movie Industry in America is DYING a very fast death,” he wrote on Truth Social. “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.”

Declaring his desire for a “100% tariff on any and all Movies coming into our Country that are produced in Foreign Lands” — a prohibitive number, as no studio has that kind of margins — Trump said he was “authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting” said tariff.

The post launched a disruptive pinball under the glass table of Hollywood, even as a Trump spokesman shortly after appeared to walk back the plan. All the discounts a production gets from shooting overseas, whether through the relative weakness of a local currency or the incentives a government offers, would mean nothing compared to this draconian penalty. And so, Trump’s logic goes, studios will just bring all the productions they outsourced right back to these shores. Voila, thousands of crew jobs and economic benefits restored.

In some ways this is exactly the same logic that drives so much of the tariff movement — and all the attendant questions with it. Does a penalty for shooting overseas really mean that a lot more film and television production will now happen in the U.S.? Or does it simply mean there will be less production overall? Both are possible, but you can’t downplay the latter scenario. Occupying the reality of an already quickly shrinking release slate, studio executives, it seems plausible, will simply decide to cut further rather than maintain the same output at a higher cost. Just as it’s hard to dismiss the objections of Apple and Nike that they can’t make their products cost-effectively without these overseas discounts and so now must either cut back or raise prices, studio executives will tell reps — and Wall Street — that they’re combating tariffs by reducing output or raising prices themselves.

But this is where comparisons to other products end. The news has prompted the question of how Trump can even enforce tariffs on a service (there’s no port of entry, for starters). But it seems an even more fundamental question abides, a distinction Trump either doesn’t know or doesn’t care to know.

When you’re talking about, say, an iPhone put together in China, it really is manufactured overseas; the design has long been rendered and workers are just assembling parts. But that’s not what happens on a Hollywood or even American indie movie. Since every movie is its own startup creation, it remains a U.S. product no matters where it winds up shooting. The script is often written here, the project is developed here, actors are cast here and notes are given here. The idea that somehow a film shot in Europe is fully “manufactured overseas” like an iPhone or pair of Nikes simply doesn’t take understand or take into account how a Hollywood film’s development works, and how American it is regardless of where cameras roll.

Of course it’s possible Trump understands this and is going ahead anyway. Which raises the question of what Trump is really up to — in a phrase, is he trying to save Hollywood or screw it? He said at the White House Tuesday that “I’m not looking to hurt the industry; I want to help the industry.” But whose industry? Certainly he does not seem interested in helping his Hollywood. All three of the president’s handpicked “ambassadors” would suffer under the tariffs. Mel Gibson is getting ready to shoot his new Passion of the Christ movie in Italy (in the same studio as Roman Holiday), Sylvester Stallone just released his England-shot action movie A Working Man that he co-wrote and produced, and Jon Voight barely mentioned tariffs in his own new plan; he’s unlikely to want this either.

Many of Hollywood’s allies on Capitol Hill would take a hit too. California senate Democrat Adam Schiff has been working hard behind the scenes for a federal tax credit — an uphill climb, to be sure, at a moment when the White House wants to avoid all perception of helping the arts — but which would be effective in restoring production.

 “I share the administration’s desire to bring movie making back to the United States,” Schiff said in a statement to The Hollywood Reporter on Monday. “While blanket tariffs on all films would have unintended and potentially damaging impacts, we have an opportunity to work together to pass a major federal film tax credit to re-shore American jobs in the industry.” Later in the day California governor Gavin Newsom said he was also working on such a proposal.

Newsom’s and Schiff’s words are music to Bob Iger’s ears. This is what studios really want, and perhaps need — an incentive to shoot here, not a stick to rap them if they don’t. But if there’s a willingness to employ these means, Trump has yet to show it.

Instead, the person he seems to be listening to is Sean O’Brien, the teamsters chief who has cultivated a relationship with the president. On Monday O’Brien and the group’s motion picture division leader Lindsay Dougherty were among the few leading figures with Hollywood connections to publicly offer applause for what Trump was doing. The Teamsters’ interests may align with and explain Trump’s own — a populist move that punishes Hollywood elites in the name of its workers.

When Wyler was preparing to shoot Roman Holiday in Italy, one of the key concessions he made was to shoot in black-and-white. This decision reduced costs for the studio; now the movie could afford to film in a more expensive overseas location and not lack for authenticity.

Trump is again gambling that studios will find a way to lower their costs so they can shoot somewhere more expensive, this time not in the name of authenticity but employment. It’s a risky bet. When it comes to cheaper foreign locations, Hollywood executives, like Princess Ann, may not know how to say goodbye, or have the budgets.