After Pres. Donald Trump announced 100% tariffs on films produced outside the US on Monday.
California has lost production spending in recent years, and has faced tough competition from other states and countries offering wider tax credits, particularly after the double strike in 2023.
Last year, Governor Newsom proposed expanding the state’s Film & Television Tax Credit program, admitting that an estimated 71% of films that failed to secure a state’s tax credit have been moved to another state. Filmla also reported that production in the Los Angeles region has dropped by around 40% over the past few decades.
The production company and studio are desperate for lifelines, but more specific details are needed from Trump’s proposals to assess the potential impact.
“(Tax) really targets people who are unnecessary out of production from the US to save money actually going back to shareholders or spending on the enforcement fee package,” said Wade Major, an entertainment industry analyst.
While it’s not clear to some extent the film’s tariff impact will likely be impacted by the film’s tariffs, experts agree that it’s likely to hurt independent films such as last year’s Oscar winner, The Brutalist.
“It’s going to increase the cost of making a film,” said Jonathan Handel, an entertainment lawyer and analyst. “No one in Hollywood asks for tariffs. They could have a devastating impact on the film business.”
After announcing his plans, Trump returned to his idea that tariffs are sure to be adopted on Monday, adding that he would ask Hollywood Studios if he was “happy” to his tariff proposal.
“I’m not trying to hurt the industry, I want to help the industry,” Trump told White House reporters. “We’re everything about work, so we want to make sure they’re happy with it.”
Another question mark on potential film tariffs: Will it affect TV shows made overseas? Streaming platforms like Netflix target a more diverse and international subscriber base and create international television shows.
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