What to expect from Trump’s 100% tariffs on films shot abroad Hollywood faces a problem of production relocation, but industry professionals are hoping for a different approach

Over the past thirty years, the gap between production costs for filming movies or TV series in the United States – particularly in California – and those for doing the same abroad has grown significantly. In other words, for a U.S. production, organizing a long international shoot, lasting several months, is often cheaper than filming in the country itself. Unsurprisingly, today at least one-third of the filming hours for U.S. movies and TV series are shot abroad. For this reason, industry professionals in Hollywood have long called for measures to bring audiovisual productions back to the national territory, along with the job opportunities they provide.

The widespread concern is that the film industry in Los Angeles is experiencing a process similar to what happened to the automotive industry in Detroit in the 1970s, where relocation severely weakened the local economy. To address the issue, Trump recently announced on his social network Truth his intention to impose 100% tariffs on U.S. film products shot abroad: in practice, if a studio spends 50 million dollars to shoot a film in Canada and then wants to release it in the U.S. market, it would have to pay an additional 50 million in taxes.

Trump is notoriously obsessed with tariffs, even though economists considered them outdated until a few years ago – essentially, this is a measure whose effectiveness has long been questioned both by economic theory, which highlighted their distorting and counterproductive nature, and by the benefits of decades of globalization and free markets.

For a long time, U.S. movies and TV series were shot almost exclusively in California, especially in Los Angeles, where most industry workers lived, and where the soundstages and headquarters of the main production companies were located. When the tax credit system started spreading around the 1990s, things began to change: this type of tax incentive was specifically designed to attract major film productions abroad, allowing many foreign countries to compete with Hollywood. Canada, for example, became the “alternative” set for many American cities. The same applies to the United Kingdom and other European countries such as Hungary, Czech Republic, and Germany. Even Italy played an important role in this “competition”: from 2017 to 2023 it offered one of the most competitive tax credits in the world, attracting major productions and providing substantial work for film crews; however, the Meloni government – for a variety of political and practical reasons – decided to intervene and substantially modify this measure, causing significant problems in the sector and disrupting the economic benefits that had been generated.

California also has a tax credit system, but the fiscal incentives offered are not comparable to those in other countries – where, moreover, the cost of living is generally less burdensome economically. The steadily rising costs in Los Angeles have further worsened conditions for the film industry: not long ago, the New York Times calculated that in Budapest a crew of seven technicians for a month of filming costs around $60,000, while the same amount in Los Angeles would barely pay a single worker of that type. It is therefore unsurprising that over the past twenty years production in California has significantly declined, leading to the closure of many businesses related to the film industry. In response to this scenario, the industry has repeatedly called on institutions to implement concrete solutions to try to reverse the trend. In this context, the #StayinLA campaign was launched, aiming to encourage major production companies to bring a greater share of films and TV series back to Los Angeles in the coming years. However, the political deadlock remains, especially since it is unclear if and how Trump’s proposal to introduce 100% tariffs on films shot abroad would be implemented. The announcement has nevertheless sparked much debate. According to many industry professionals, it could paradoxically make the situation even more complicated: the sector has long demanded more forward-looking policies capable of making the United States (and California in particular) competitive again on the international stage, rather than short-term measures that create economic uncertainty and make long-term production planning even more difficult.