Trump’s trade war has its Hollywood moment

Good morning and welcome to White House Watch. Mark Carney is slated to meet Donald Trump in Washington today for their first face-to-face meeting since the Canadian prime minister swept to power on an anti-Trump platform last Monday.

For now let’s jump into:

Making Hollywood Great Again

Trump’s Marie Antoinette moment

Corporate America’s fight against tariffs

Trump is taking his trade war to Hollywood.

The president said on Sunday that he would impose a 100 per cent tariff on films made abroad because “the Movie Industry in America is DYING”.

In a post on Truth Social, Trump accused other countries of using “all sorts of incentives to draw our filmmakers and studios away”. He concluded: “WE WANT MOVIES MADE IN AMERICA, AGAIN!”

Media executives questioned how the tariffs would work in practice, particularly in the age of streaming, given that films are not a physical good that passes a border.

Nevertheless, shares in Netflix yesterday dropped about 2 per cent as investors fretted about higher costs. Analysts also warned that the threatened levies could be “beyond devastating” for production hubs in countries including the UK, Canada and Australia.

The US film and TV sector generated a trade surplus of $15.3bn in 2023, with a positive balance of trade in every major market in the world. Nevertheless, it’s true that Hollywood has lost ground in the past two decades, as countries in Europe and Asia attract filmmakers with generous offers of tax incentives to offset some of their costs.

Production in Greater Los Angeles fell 5.6 per cent in 2024, making it the second-least-productive year ever, according to industry body FilmLA.

Executives were racing yesterday to figure out whether the threatened tariffs were even viable. “In what sense can you put a tariff on a Netflix show made in the UK and distributed worldwide over the internet?” said Peter Bazalgette, former chair of British broadcaster ITV.

He said the fate of the film industry could depend on what exactly Trump categorised as “film production”, and whether he would include the high-end streaming series being made by global platforms such as Netflix and Amazon, which contribute the highest spending overseas.

The White House declined to offer further details of the plan. A spokesperson told the Financial Times that the administration was “exploring all options” in order to “safeguard our country’s national and economic security while Making Hollywood Great Again”.

The latest headlines

What we’re hearing

There was a “whirlwind” of lobbying in Washington in April as the world’s most powerful business leaders rushed to seek carve-outs and climbdowns from Trump’s tariffs, according to Republican lobbyist Brian Ballard.

Executives from JPMorgan’s Jamie Dimon to Apple’s Tim Cook launched a mostly private campaign to pull the US president back from the brink of what they saw as an extremely damaging trade war. Some played on their personal connections with Trump, struck during trips to Mar-a-Lago or through hefty donations to his lavish inauguration in January.

“A lot of the tariff carve-outs, like the one for electronics, didn’t come from broad industry lobbying campaigns. It seemed more like Trump was hearing directly from executives, like Tim Cook,” said one Washington corporate adviser. Cook secured exemptions from the overall 145 per cent tariff on products from China used to make Apple’s iPhones.

Billionaire shale magnate Harold Hamm, who co-ordinated oil and gas donations for Trump’s election campaign, said he managed to convince the president to pull back on tariffs that would have harmed the energy sector.

“I did talk to Trump about what it would do to [oil] prices, particularly in different parts of the country,” Hamm said. He said he also pointed out that imposing higher tariffs on Canadian crude imports could hamstring some refineries in the US. “And so the whole thing got complicated and the president said: ‘OK let’s not do that.’ He didn’t think it was a good idea . . . That was a success.”

Business leaders are increasingly steering clear of publicly criticising Trump, and instead spending their time sending back-channel messages complaining about tariffs to Treasury secretary Scott Bessent, according to a top Wall Street executive who regularly speaks to the administration.

“It’s better not to do it on television. It’s not going to get you very far,” he said. “You are better off having a more substantive conversation behind the scenes.”

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