Hollywood faces growing uncertainty as former U.S. President Donald Trump's proposal to impose tariffs on foreign film productions sparks fears of global retaliation, with analysts warning of risks to America's $42 billion film services trade surplus. The announcement sent shares of major U.S. entertainment companies downward, reflecting market unease about protectionist measures conflicting with the industry's global interdependence.
Global Backlash Looms
Analysts predict countries like Australia, New Zealand, and EU members could implement countermeasures ranging from import quotas to screening taxes. 'Retaliation will kill our industry. We have more to lose than gain,' said William Reinsch, former U.S. Commerce Department official. European markets account for up to 80% of Hollywood's international box office revenue – a dominance now at risk.
Domestic Divisions Emerge
While Trump claims the move would reshore film production, White House spokesperson Kush Desai clarified no final decisions have been made. The proposal has divided policymakers, with critics arguing it ignores how foreign locations like Canada and the UK help studios manage budgets through co-production partnerships essential for blockbuster films.
Industry Warns of Collateral Damage
Scott Roxborough of The Hollywood Reporter described the tariffs as 'disastrous' amid existing sector challenges. 'Additional production costs could force studios to abandon mid-budget films entirely,' he told China Media Group, noting Europe's potential to mirror U.S. actions through tit-for-tat measures. Such escalation could reduce distribution channels and marketing partnerships critical for global releases.
