Despite renewed threats from US President Donald Trump to impose a 100 percent tariff on films produced outside the United States, the global film industry continues to operate with resilience and minimal disruption. Productions such as "Star Wars: Starfighter" are actively filming in Britain, while soundstages in Hungary and post-production houses in Australia remain bustling with activity. Trump's proposal to levy the tariffs, aimed at stemming the perceived "very fast death" of the American film industry by incentivizing domestic production, initially caused significant uncertainty and delays in May. However, industry responses to the renewed threats have been relatively muted, with many professionals treating the latest announcement with scepticism.

Industry data from researcher ProdPro shows that although there has been a 15 percent overall decrease in spending compared to the previous year—attributed mainly to a pullback in scripted television series and high-budget films—there is no evidence Hollywood is abandoning its global production partnerships. In fact, US studios and streaming services spent $24.3 billion on projects overseas during the last 12 months, surpassing the $16.6 billion spent domestically. The United Kingdom and Canada remain the two primary beneficiaries of Hollywood's international production investments, attracting $8.7 billion and $6.4 billion respectively, buoyed by generous tax credits and competitive labour costs. Other countries, notably Australia, Hungary, Ireland, and Spain, collectively account for nearly a quarter of Hollywood's global production spending.

The shift toward global production hubs has been accelerated by factors including the COVID-19 pandemic and Hollywood strikes by writers and actors in the US. For instance, Australia served as a production "bubble" during the pandemic, particularly in Queensland, where filming could continue despite global shutdowns. Meanwhile, Hungary’s soundstages are reportedly operating at full capacity with a mix of domestic and international productions. Enhanced incentives, such as Prague's increase in tax breaks to 25 percent and Britain’s 25.5 percent relief for qualifying projects, further attract Hollywood projects. This multi-location approach not only capitalises on financial incentives but also allows studios to expedite production by utilising international time zones, effectively enabling 24-hour work cycles across continents.

Despite mounting pressure from President Trump, who has framed the issue as a matter of national security and economic competitiveness, there is no immediate sign that these tariffs will be implemented. The White House has acknowledged considering all options but has yet to finalise any decisions or provide specific details on enforcement. The administration’s ongoing evaluation underscores the complexity of legislating tariffs on films, which are often multinational endeavors created over multiple locations.

Within the industry, there is a strong push for alternative solutions, notably federal tax incentives to bolster domestic production competitiveness. A coalition of American film unions and guilds, alongside veteran actor Jon Voight—who notably met with Trump to discuss policy—advocate for national tax incentives rather than punitive tariffs. The bipartisan CREATE Act currently before the US Congress aims to extend and expand tax deductions for US productions, providing a more constructive approach to addressing the competitive challenges faced by the American film sector.

Industry insiders warn that while the precise impact of Trump’s tariff proposals remains uncertain, their actual implementation could have devastating consequences for international production hubs, many of which rely heavily on Hollywood investments. However, for now, the film industry appears to be navigating these threats with caution but without significant operational disruption, continuing to benefit from a globalised production network that leverages financial incentives, skilled labour, and state-of-the-art facilities worldwide.

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Source: Noah Wire Services