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Slapping tariffs on foreign films, US President Donald Trump’s latest wheeze, is a plot riddled with holes. Films, like cars, are often multinational affairs. Random example: The Apprentice, a biopic charting the rise of a younger Trump, corralled funding from four countries. The director is Iranian-Danish; two of the leads hail from eastern Europe.
It helps to start with some scene-setting. The White House has generally presented tariffs as a way of whittling down the US trade deficit. Yet when it comes to films, the US enjoys a surplus: it totalled $15.3bn in 2023, according to the Motion Picture Association, an industry body. Exports were treble the value of imports.
Logical inconsistencies aside, there is the practicality of exacting a levy on something that does not come off a ship or physically pass through customs inspectors’ hands. Pricing of streamed content is a dark art, and producers are loath to put up subscriptions: Netflix took years to crack down on password sharing.
Investors certainly did not see Netflix being affected. Shares in the US streamer initially fell on Monday on the news but have since recovered. In the UK, those in Facilities by ADF, which provides transport on sets, are down 16 per cent since the start of the week.
It may be that the real villain Trump has in his sights is the array of tax breaks and other incentives that foreign countries, including the UK, shell out in order to lure Hollywood. That the practice is so widespread is testament to the perceived value of developing a thriving creative industry. Consider South Korea, which has built hefty soft power on the back of shows such as Squid Game and Oscar-winning Parasite.
The US could follow suit or, alternatively, pursue different funding streams to give a leg-up to independent producers. One option under consideration in the UK, for example, is to tap streamers, via a levy on revenues, to in effect cross-subsidise public broadcasting high end television. The risk, of course, is that some governments are inclined to make financial support conditional on including, or avoiding, certain kinds of content.
But do not write off British production and logistics just yet. The reason US filmmakers themselves are happy to schlep crew and kit across the globe is that cheaper costs help their finances stack up. Barbie was not alone in erecting her pink plastic home in Britain; last year the UK pulled in almost £5bn from Hollywood blockbusters shot in UK studios.
Absent that, this plot will develop upon strictly predictable lines. The sequel — or rather prequel — began last month when China struck back at the first wave of tariff increases by slimming down its already slim quota of US films. America risks seeing one of its rare surpluses shrivel back — and making production costlier will not make Hollywood great again.
louise.lucas@ft.com
