“Foreign governments have successfully led to film and television production, and many of the jobs they have created, leaving the US with aggressive tax incentives and subsidies. Films aimed at first release in the US are increasingly being shot overseas.
The entertainment industry has been mercilessly assaulted over the past few years. Runaway productions generally refer to productions intended for release or broadcast in the US, but are actually filmed in other countries. Or it is a work created by an LA-based studio that shoots in other states to exploit competitive tax incentives and other economic benefits.
The president called the incentive to provide production overseas to seduce overseas “a coordinated effort” by other countries, and said he is allowing the Commerce Department and US trade representatives to immediately launch a 100% tariff on “all films that come to our country that are produced on foreign lands.”
It has yet to be decided how tariffs on foreign films work, or in fact, what constitutes American or foreign films in the age of streaming, co-production, and globalized post-production.
Unlike most of Trump’s trade-related actions up until now, this latest salvo targets digitally transmitted services that are increasingly dependent on international supply chains, rather than physical goods coming through US ports.
At the very least, this impulse was highly regarded among representatives of Hollywood’s plagued workforce.
“Studios are chasing cheap production costs overseas, taking away the American labor that built the film and television industry. These giants line up in their pockets by mercilessly cutting corners, abandoning American crews and exploiting tax loopholes.”
The union’s film and theater division represents driver and transport experts, casting directors, animal wranglers and other crafts.
“I would like to thank President Trump for boldly supporting the union’s work as others turn their heads. This is a strong step towards ultimately restraining non-American addiction in studios to outsource members’ work.
President’s Missive appears to be dealing with the fact that the number of American studio films is on the rise. Mostly in European countries such as Canada, the UK, Australia and Hungary, they provide competitive subsidies and tax credits, a simple regulatory environment, and labor costs to growers seeking to provide projects in a budget.
IATSE, which represents US and Canadian members, also does not put Canadian members at a disadvantage.
The IATSE urged federal policymakers to level the playing field for US production, including production tax incentives for federal films, but said they would await more information about the administration’s proposed tariff plan. “We should not harm Canadian members on our ultimate trade policy. We continue to rely on them, not the industry as a whole.”
Toronto, the UK, Vancouver, Central Europe and Australia ruled the list, with U.S. Hub California, Georgia and New Jersey ranked under them.
“The key factors affecting these preferences include favorable tax incentives, infrastructure, available skilled people, and currency exchange rates,” the report states, saying that an increasingly competitive market for tax incentive schemes is likely to form a geographical distribution for the coming years.
“Lower volumes stay here,” the report noted, with the number of US productions that started principal photography in the second quarter of 2024 falling by nearly 40% from the 2022 levels compared to a global DIP of 20%.
“Each drop reflects the global production cuts and the continued territorial impact of California’s continued work,” the organization said in an April statement.
There is no central database or reliable way to track Runaway production, which has been the subject of concern for Hollywood unions for at least the last 20 years. However, in the industry, many people have observed that over the past five years or so, they have accelerated at an unprecedented rate.
“Built by the middle class”
Other union leaders warned against blanket tariffs that could not explain industry reality.
“If this tariff policy is a headline response to a production leaving the US, it’s not a solution, it’s a hindrance,” David Graves, executive committee member of IATSE Local 728, who represents the studio’s electric lighting engineers, told the Epoch era in text messages.
Emphasizing that the film industry does not operate on the same timeline or structure as brick and mortar stores, Graves said a one-size-fits-all approach could do more harm than good unless notified by people working in the industry.
“If the administration really wants to understand how tariffs are applied to the American film industry, they need to talk to electricians, grips, camera operators and wardrobes, as well as A-list actors who are separated from the reality of payroll taxes, foreign incentives, and payroll taxes that look like terrestrial economic contracts,” Graves said.
The famous producer and celebrity voice said, “Don’t talk for the working-class crew who are watching their livelihood disappear without a transition plan, retraining, or safety net.”
The day after Trump’s tariff announcement, Oscar-winning actor John Voight, who previously named Hollywood “special ambassador,” said in a video posted on social media platform X that he submitted a detailed plan to the president at Florida’s Marlago Real Estate, which outlines “specific tax provisions” that help both film and television production.
“Our industry has been suffering from great pain lately. …Many Americans have lost their jobs in works they went abroad. People have lost their homes and are unable to support their families,” Voight said.
In an emailed statement to the Epoch Times, Steven Paul, Voight advisor and CEO advisor for SP Media Group, said the document issued by Deadline was “part of a personal discussion and never intended for public consumption.”
The proposal was created “only for discussion purposes,” Paul said, but it did not reflect formal policy or position. And while the ideas listed were gathered from exploratory conversations, with Paul having alongside stakeholders from a wide range of industry, including unions, studios and streaming platforms, Paul said the leaked proposals “does not claim to represent the collective views of the films and television organisations participating.”
All of this applies to all-out content, including theater distribution, broadcast networks, cable, streaming services such as Netflix and Amazon, and digital platforms such as YouTube.
The draft plan calls for sudden tariffs on US-based production companies that choose to produce abroad at 1220% of the value of foreign incentives.
“This makes sense not as a penalty, but as a necessary step to leveling out the arena, while not creating an endless cycle of chasing the best incentives,” reads the document.
The draft plan also addresses “inherent California issues,” including the state’s “severely inadequate” tax incentives, calling Hollywood a “critical species.”
California Gov. Gavin Newsom responds quickly, suggesting that the state and federal government are working together on a $7.5 billion federal tax incentive.
“California has built the film industry and is ready to bring more work home,” Newsmom wrote in X’s post.
If tariffs, or a combination of increased tariffs and domestic incentives, brings jobs back to the US, Graves said the next question is whether the US has infrastructure to support workload.
“Foreign markets respond faster than Washington can legislate. It offers certified investors a more stable and reliable opportunity, increasing liquidity, increasing intermediate production, and creating a consistent employment pipeline that the US cannot currently match,” Graves said.
“The American film industry is not made up of wealthy people. It is built by the middle class. …When it comes to job creation and labor stability, it’s not a blockbuster film that creates jobs on a large scale.
Where are the movies made? There’s no simple answer
While around a third of global feature films can be categorized as “American,” the US major studios account for more than 87% of all global features in 2024, according to an independent data analysis by UK-based entertainment industry analyst Stephen Follows since 2000.
Data is dependent on IMDB self-reported origin.
“There is no universal database or framework for defining or verifying the national identity of a film,” reads in the Subsack Post following Trump’s announcement.
“IMDB allows producers to self-report, but awards, festivals, and national funding each apply their own standards. These systems often compete and lead to different answers depending on who is asking and why.”
Furthermore, he said that many films today are co-produced by more than two countries, and streaming platforms like Netflix routinely commissioning projects without a clear country of origin.
“The project was developed in Los Angeles, produced by a British company, filmed in Spain, and sold as “international content.” While the main photography could take place in multiple countries, post-production (special effects, editing, music) is outsourced to centres with burgeoning infrastructure in countries such as Canada, the UK and India. ”
Plans to impose tariffs require consensus on what determines the national identity of a film.
“Currently, there is no formal definition of what makes a film American. There is no certification process, there is no threshold for domestic content, and there is no single agency responsible for determining national status,” he wrote.
According to a follow-up analysis, about 24% of films made by Hollywood Studios took at least one day in the UK in 2019, with over 19% taking photos in Canada.
If the president’s plan follows Voight’s recommendations, the starting point may be that “made in America” movies and shows are at least 75% production and post-production in the United States.
Structural changes
Actors, directors, producers and their sub-line counterparts are used to the decline in their work in Hollywood. But this can be different.
Patrick Adler, co-founder of Westwood Economics and Planning Associates and co-author of the OTIS Report, said the new reality of Hollywood is more of a business owner and is best understood as something like Silicon Valley.
“Hollywood itself is not a place where films and TV shows are made or filmed,” he told the Epoch Times in late 2024.
Silicon Valley used to build chips, but now it outsources its functionality, but said, “Silicon Valley is finished because Silicon Valley doesn’t make silicon chips anymore.” But for some reason, Hollywood people say Hollywood is dead.
“Photographing isn’t everything.”
But for tens of thousands of camera operators, grips, lighting technicians, costume department workers, hair, makeup artists and composers who say their jobs have not returned after the strike, that new reality means that there is less space for skilled deals and crafts that have built the industry in the first place, and the large workers mean more and more power to help more and more people.
Potential impact
Unlike many industries President Trump is trying to deal with the trade deficit, the US has a heartfelt surplus in film and television programming.
If tariffs are implemented, it could affect US studios that co-produce and outsource different parts of the international supply chain, which are more diverse than foreign-made film studios that are not part of the economic or cultural capabilities of US studios.
IATSE Local 728 Graves warned against underestimating the response from foreign trading partners.
“Country such as Canada, the UK and Australia have developed robust federal agencies dedicated to attracting film production,” he said. This focuses on mid-tier productions (one of the main reasons for their $6 million to $35 million budget).
Such films disappear not because investors are lacking in demand, but because they can’t justify the risk, he said.
“Other countries are studying this. We understand that these small works create significant work with far less taxpayer investment. In response, they have made the incentives for production and distribution that we simply don’t have, not particularly at the federal level.”
If the US enacts 100% tariffs on all foreign content entering the market, he said, it could be a severe underestimation of its competitive adaptation capabilities.
“These countries are not just retaliatory tariffs, they can deploy better tax incentives, better infrastructure and distribution networks.
The UK and Canada’s response
British and Canadian politicians and union leaders have expressed vigilance about the potential impact on the industry, which is still recovering from the pandemic and the 2023 strike.
Such foreign-silenced production would likely be a major target for tariffs aimed at revitalizing US-based production, but the Trump administration has not provided details. A White House spokesman followed Trump’s initial announcement in a statement that “no final decision has been made,” and issued a statement that the administration is “exploring all options” to implement the president’s order.
The Commerce Department did not immediately answer detailed questions about how tariffs work.
Michael Bevan, CEO of the British Production Guild, hit the tone of settlement in an emailed statement to the Epoch Times.
“PGGB is standing shoulder to shoulder with its UK film partners to ensure that both the world-class film industry and the freelance workforce are protected, protecting US tariff uncertainty at this time,” says Beavan.
“We have long and mutually beneficial relationships with colleagues and friends of American filmmakers, regardless of geographical or political boundaries, which are always celebrated in their creativity and collaboration.
The guild’s media representative said he is working with representatives from the UK screen agencies, broadcasters, studios and streamers across the board to develop a response to the proposed tariffs.
Meanwhile, PhilippaChiles, head of Bectu, representing 40,000 workers in the UK entertainment and media industry, said in a statement that the tariffs involved after Covid and the slowdown in the world “just recovering, we can worry about thousands of freelancers who have mastered films in the UK.”
The government said, “We must move quickly to protect this important sector and support freelancers who will strengthen it.
