The US Film Tariff Threat has not gone away

President Trump first announced plans for a 100% tariff on movies made in other countries in May 2025, and the film industry is waiting for more details.

The saga of US tariffs on foreign films feels like one of those movie plots where the hero defeats the villain, only to discover his adversary rises up again and fights another day. You can see this plot twist coming when the film has another 20 minutes to run! How much running time there is left for President Trump to impose theatrical tariffs maybe determined by the period he has left in office.

President Trump first announced plans for a 100% tariff on movies made in other countries in May 2025, just before the Cannes Film Festival. This caused considerable consternation at the Festival. But there was no explanation on how such a tariff would or could be calculated. There was total silence from the US administration with most industry professionals assuming the threat had disappeared. But in September 2025 Trump alluded to the threat claiming that the American industry had been `stolen by other countries`. This statement was followed by a deafening silence until last month when Trump once again raised the issue in an interview with the California Post, (an offshoot of the New York Post). In the interview he said that he was going to introduce tariffs and will offer `low interest bonds` to help Hollywood production. No further details have been released. Interestingly the International Emergency Powers Act, which gives the President authority to address threats to national security and the economy does not extend to movies that are specifically listed as an exception.

Concerns about the US film industry are justified and Trump’s comments that it is in decline are accurate. Hollywood once ruled world film production and cinema: that is no longer the case. Film production has been moving from California over the last 10 years lured by attractive film tax incentives and lower labour costs in other regions. Many US States including Georgia, Mississippi, New York, New Jersey and New Mexico offer a mixture of refundable and transferable credits. However, these incentives are conditional, typically requiring minimum in-state expenditure and local labour usage, and they seldom compensate for the high costs associated with A-list talent.

There is no Federal Tax Credit and this is where the US seems to be missing out. The UK has a tax credit regime wherever the production is filmed. This is highly attractive, it is clear and transparent, covers nearly all production costs and overseas labour costs incurred in the UK and is paid out in the form of a cash rebate within a narrow window after application.

It would however be foolish not to take these threats seriously. The creative industries have proved to be an outlier in terms of their success for the economy. There is huge reliance on inward investment in the UK.

During the year to June 2025 BFI Research and Statistics department reported that 86% of film production and 83% of High-End Television production in the UK was funded from overseas; most of this will have come from the US from the likes of Apple, Amazon, Warners and Disney.

We wait to see what developments may come out of Washington, but should restrictions be imposed, I’d suggest that the UK government would need to widen the current tax credit regime further.

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