Global film industry fends off renewed threat of tariffs on Trump film

Star Wars: Starfighter Filming is underway in Britain, sound stages in Hungary are packed and post-production houses in Australia are buzzing as the global film industry continues to roll despite US President Donald Trump’s fresh threats to impose tariffs on films made outside the United States.

Trump has proposed imposing a 100 percent tariff on foreign-made films to stem the loss of filmmaking jobs in production hubs around the world, reviving an idea first floated in May.

The initial call for tariffs shocked the film world and temporarily halted projects and international film financing deals as producers assessed the levy’s potential impact on the financial viability of each project, two sources familiar with Hollywood film financing told Reuters.

This time, the reaction was more muted.

“Besides the initial uproar of, ‘Oh, he said it again,’ people don’t take it as seriously as they did the first time,” said Lee Stone, a partner at London law firm Lee & Thompson, who worked on the Emmy-winning Netflix show. Teens.

Trump initially called for 100% tariffs on films made outside the country in early May to prevent the “very quick death” of the US film industry as the incentives lured filmmakers to production hubs around the world. The announcement – just weeks before the Cannes Film Festival – caused panic.

“It was terrible timing. Everyone was saying, ‘What’s going to happen?'” Stone said, noting that Trump’s threat resulted in temporary paralysis. “I don’t get the impression that there’s the same pause this time.”

Newly released figures from industry researcher ProdPro reveal that while overall spending is down 15% from last year amid a decline in scripted TV series and feature films, there is no evidence that Hollywood is abandoning its global production hubs.

“We see nothing in the data to suggest that studios are choosing to film more of their production in the US because of concern about tariffs,” said ProdPro CEO Alexander LoVerde.

The US remains the industry’s biggest production hub, with $16.6 billion in spending over the past 12 months, according to ProdPro. But Hollywood studios and streaming services spent even more — $24.3 billion — on film and TV projects produced outside the U.S. in the same period, ProdPro said, as they took advantage of tax credits, lower labor costs and world-class sound stages.

The UK has become a major beneficiary of Hollywood’s exodus, attracting $8.7 billion in film and television spending over the past year, including major film productions such as Star Wars: Starfighter, the much-discussed next entry in the Star Wars The saga is expected to be released in May 2027. Canada comes in second with $6.4 billion, according to ProdPro’s latest production trends report.

Other regions – Australia, Ireland, Hungary and Spain – together accounted for nearly a quarter of total production.

Supercharged COVID-19 production output

The COVID-19 pandemic and the Hollywood strikes by American writers and actors have supercharged the exodus that began years earlier.

“Australia became a production bubble, where particularly in Queensland, productions could continue even when the rest of the world was shutting down,” said University of Melbourne film expert Kirsten Stevens.

Prague increased its tax breaks from 20% to 25% in January, while Britain offers 25.5% relief to qualifying films and TV productions, with a higher rate for animated films and a new credit for smaller independent films.

In places like Central Europe, a deep tradition of filmmaking and lower labor costs have attracted a long list of Hollywood filmmakers, including the Russo brothers The Gray Man, Netflix’s Oscar-winning All quiet on the Western Front in the Czech Republic and Warner Bros. Studios Dune: Part Three, which began filming this summer in Hungary.

“Hungarian sound stages are currently operating at full capacity with international and domestic productions,” Csaba Kael, the government’s commissioner for the development of the Hungarian Film Industry, told Reuters.

Any change in U.S. trade policy will take time to implement, Kael said.

Hollywood studios have discovered that distributing work across multiple locations can speed up the production schedule, allowing films to be completed faster and cheaper.

“It’s not unusual in high-end films that a bunch of work will come to Australia, but a bunch of work might also go to New Zealand and London and somewhere else,” said Mike Seymour, an Emmy-nominated visual effects specialist and lecturer at the University of Sydney.

“Sometimes the film is literally worked on 24 hours a day because of all the time zones,” he said.

Instead, the studios are pushing for tax incentives in the US

For now, it’s business as usual for filmmakers, said Stephen Weizenecker, an entertainment attorney with Barnes & Thornburg in Atlanta. They hope to avoid any disruption that throws off a production’s schedule, which can result in actors, directors or even a filming location being unavailable.

“The movie industry hates uncertainty,” Weizenecker said. “When it starts to hesitate, it means that a project stops completely.”

A coalition of US film industry associations and unions, joined by veteran actor Jon Voight, has asked Trump to consider a federal tax incentive to put domestic film production on a more competitive footing with incentives offered in other countries.

“What we really want is a national tax incentive that would be more effective than any tariffs,” said one studio executive.

Meanwhile, a bill with bipartisan support, known as the CREATE Act, was introduced in the US Congress last summer. It would extend the tax credit for American productions, which is set to expire in December, and raise the cap on deductible costs.

The looming threat of tariffs raises concern about the potential impact on the economy and livelihoods in manufacturing hubs around the world if Trump follows through.

“It’s hard for anyone here to understand the possibility of it going into effect, but if it did, it would have a huge impact,” said one industry speculator who declined to be identified for fear of losing funding. “It would be devastating.”