As a tax professional with over 25 years navigating the intricate landscape of tax revenue assignments, I’ve seen a myriad of creative approaches to generating revenue and addressing societal needs through the tax system. President Trump’s recent announcement regarding a potential 100% tariff on movies produced outside the United States is certainly a bold move, and I understand the underlying sentiment: to support American jobs, incentivize domestic production, and perhaps alleviate some tax pressure on American taxpayers by placing it elsewhere. However, the reaction from Hollywood has been swift and largely negative, highlighting significant complexities and potential pitfalls that may not be immediately apparent. Let’s delve into why this proposal, while perhaps well-intentioned, faces considerable hurdles from a tax and industry perspective.
Economic Nationalism and Job Creation
President Trump’s proposal for a sweeping 100% tariff on movies produced outside the United States appears to be a multifaceted strategy rooted in a philosophy of economic nationalism and a strong desire to revitalize the American film industry. As he has publicly stated, he perceives that “Other nations have been stealing the movies, the moviemaking capabilities, from the United States,” a sentiment that underscores a focus on perceived unfair competition and the significantloss of American jobs due to “runaway production.”
The core intention behind this dramatic tariff is clearly to make filming overseas prohibitively expensive, effectively counteracting the financial incentives offered by other countries, such as tax rebates and lower labor costs, which currently draw production away from the US. By imposing such a significant financial disincentive, the aim is to force studios and production companies to bring that creative work, and the associated jobs and economic activity, back to American soil. From a tax and economic perspective, this is a direct attempt to utilize a powerful trade tool – a tariff – not just for revenue generation, but primarily as a means of economic incentive and job creation.
It seeks to level the playing field for American production while simultaneously aiming to shift a tax burden onto those who choose to produce films abroad, even while benefiting from access to the vast American market. In essence, it’s a punitive measure designed to discourage certain economic behavior (filming overseas) and aggressively incentivize another (filming domestically), with the ultimate goal of boosting the US economy and potentially increasing the tax base derived from a revitalized American film industry.
Not Seeing Eye to Eye
President Trump’s proposal for a 100% tariff, framed as a response to other nations “stealing” production, has sparked significant apprehension in Hollywood, with many fearing that this “eye for an eye” approach could lead to devastating consequences. The immediate and most pressing concern is the potential for a “virtually complete halt of production.” Industry executives are “apoplectic,” convinced that the president has not fully grasped the intricate web of global production and the potential for unintended negative outcomes on an industry still reeling from dual strikes and a “content recession.”
A major hurdle, and one that fuels their disbelief, is the fundamental nature of movies as intellectual property and services, not goods typically subject to tariffs. This raises significant legal and jurisdictional questions about how such a tariff would even be applied or enforced. The economic reality is that filming overseas is often significantly more cost-effective due to lower labor costs and attractive rebates – a crucial factor in making many productions financially viable – which is why, as Jay Sures, vice chairman of United Talent Agency, warns, a blanket tariff on foreign production has the power to “bring the movie business to a standstill.”
Beyond the immediate financial impact, there are a myriad of logistical and practical questions that remain unanswered: How would this tariff be calculated for productions filmed in multiple locations? Would filming a historical drama in its authentic setting incur a massive penalty? The president’s justification of foreign production as a “national security threat” also lacks clarity and faces potential legal challenges. For some, the severity and potential impracticality of the proposal even raise questions about whether it’s a genuine policy proposal or, in part, a political tactic aimed at an industry often perceived as critical of the administration.
Why This Tariff Could Cut Off More Than Just Production
As a tax professional with decades of expertise navigating the financial intricacies of a myriad of industries, including the vibrant realms of film and creativity, I’ve learned a crucial lesson: while the intention behind a policy can be commendable, the devil is often in the details – and sometimes, in the unintended consequences. As the old saying goes, “Don’t cut off your nose to spite your face.” While President Trump’s desire to bring production back to the US is understandable, this specific tariff proposal, in my professional opinion, faces significant practical and technical hurdles that could render it ineffective or even detrimental.
Firstly, and perhaps most fundamentally, this proposal attempts to apply a tool designed for tangible goods – a tariff – to something entirely different: intellectual property and services. Movies aren’t widgets crossing a border in a shipping container. They are complex creations involving talent, financing, and production spread across the globe. How do you even define “produced outside the United States” in a meaningful and enforceable way when a film might have an American director, a European cast, be financed internationally, and filmed in multiple locations? This isn’t a simple customs declaration. The legal and technical complexities of applying a tariff to a service, and determining its “foreignness,” are immense and could lead to endless disputes and practical nightmares for both the industry and the government attempting to collect the revenue. It’s a square peg in a round hole.
Secondly, the entertainment industry is a vast and interconnected global ecosystem. A blanket 100% tariff on foreign production doesn’t just impact where a movie is filmed; it threatens to disrupt the intricate web of international financing, distribution deals, and talent relationships that are essential to Hollywood’s global reach and profitability. Many blockbusters rely on international co-production deals and access to diverse locations and talent. Imposing such a severe tariff could not only make overseas filming impossible but also strain these vital international partnerships. Furthermore, a move like this could easily invite retaliatory tariffs from other countries on American films and entertainment exports, ultimately hurting the very industry it aims to help and potentially diminishing the US’s significant trade surplus in this sector.
Finally, and from a tax strategy perspective, this “stick” approach of a punitive tariff seems less likely to achieve the desired outcome than more incentive-based “carrots.” For years, states within the US and countries around the world have successfully attracted film production through targeted tax credits, rebates, and other financial incentives. The industry itself, and even parts of the administration, acknowledge the effectiveness of these approaches. A federal tax incentive for domestic film production, for example, would be a far more direct and proven method to encourage filming in the US. Relying on a legally questionable and practically complex tariff to achieve this goal, when more effective and widely accepted tax-based solutions exist, suggests a potential miscalculation of the most efficient path forward.
Final Scene
While President Trump’s objective of revitalizing the American film industry and bringing jobs back to the US is a goal I can certainly appreciate, the proposed 100% tariff on foreign-produced movies, from a practical tax and economic standpoint, appears to be a classic case of a well- intentioned idea that overlooks critical realities. The inherent complexities of applying a tariff to services like movies, the potential for significant disruption to a global ecosystem, and the existence of more proven incentive-based tax strategies all point to this specific “stick” approach being potentially unworkable or even counterproductive. As someone who has navigated the intricate world of taxation for more than 25 years, it’s clear to me that achieving the desired outcome requires a more nuanced understanding of the industry’s mechanics and a more strategically aligned approach to tax policy than this blanket tariff provides.
JoAnna Laiscell
May 6, 2025
JoAnna Laiscell is the visionary President and CEO of Nothing But Numb3rs, a premier accounting and taxation firm renowned for its specialized expertise in nonprofit organizations, grants management, and the intricate world of law firm IOLTA and IOTA accounts. Ms. Laiscell has expertly managed billions of dollars, solidifying her reputation as a highly respected authority in her field. Her distinguished clientele reflects the breadth of her influence, including prominent figures such as celebrities, respected justices, corporate executives, and a constellation of creative geniuses – encompassing accomplished writers, celebrated movie directors, prolific songwriters, captivating performers, dynamic entertainers, and elite athletes.
