How Do You Tariff a Film Without Borders?

By Ryan Cantu, LFS Board Member

In a May 5, 2025 post on Truth Social, President Trump announced a plan to impose a 100% tariff on "any and all movies coming into our country that are produced in foreign lands." The announcement created a sense of chaos and confusion among American studio executives and producers, largely because the President has not specified how precisely such a tariff would work in practice. 

Unlike a tangible product like a tomato or an iPhone, which can be assigned a monetary value on which a tariff is imposed, a film is not necessarily "imported" into the United States. Even if a film is primarily shot abroad, much of its value may still have been generated domestically. For instance, a movie might originate from a screenplay written by an American citizen in Los Angeles. Its director, key actors, and other "above the line" personnel may be U.S. citizens living here. While the film may be then shot in Canada or New Zealand, all editing, post production, and distribution efforts may return to the U.S. to be performed by U.S. citizens. This type of complex international production is typical of large blockbuster films (e.g. Minecraft (shot in Canada), Avatar (shot in New Zealand), and Mission Impossible (U.K.)), but is also present with smaller, independent productions. In these situations, many questions remain as to how a tariff or similar penalty might be imposed fairly in a way that does not also hurt the U.S. portion of the production. Additionally, because a movie does not necessarily have a set monetary value like an imported tangible product, it is unclear on what value a tariff would be imposed. The film's international budget? Its box office or streaming sales? 

Despite these questions, the President's announcement did not come from nowhere. He is correct that the American film industry, as well as the countless persons it employs, have suffered as production has moved abroad. According to research firm ProdPro, in 2023 about half of spending by U.S. producers on movies and tv projects with budgets of more than $40 million went outside the U.S. A majority of blockbuster movies filmed today are filmed abroad. Within the United States, the same trend has occurred as the movie industry has moved outside of Los Angeles as states like Georgia, New Mexico, and Oklahoma have lured productions with financial incentives. 

Laredo Film Society acknowledges these concerns and is dedicated to protecting the livelihoods of filmmakers in the South Texas region and Texas at large. However, like many people in the film industry, we are skeptical that tariffs can effectively achieve the goal of reshoring film production without hurting overall filmmaking. As with the President's other tariff announcements that have rattled markets, a tariff-type penalty on films can result in a trade war that could cause other countries to make it more difficult to film there or to distribute U.S. films within their borders. There is also a very real possibility that many good films will simply not be made. Some films by their very nature must be shot abroad. A documentary focusing on refugees crossing through Mexico or on the decimation of the Amazon rainforest obviously could not be shot in California or Oklahoma.

Currently, LFS does not work with any productions that would be directly impacted by the President's tariff proposal. But because we collaborate with many people who work on both sides of the U.S.-Mexico border, it is possible that productions could be impacted if they are shot in Mexico. LFS will continue monitoring the tariff proposal to ensure that it can provide adequate support to any impacted filmmakers. 

Instead of tariffs, LFS supports measures that have proven successful in attracting film productions: tax and other financial incentives. These measures have been floated by California Governor Gavin Newsom, who has proposed a $7.5 billion federal tax credit to reshore American filmmaking. The Texas legislature just announced an historic investment to promote Texas filmmaking, which would deposit $500 million into the new Texas Moving Image Industry Incentive Fund every two years until 2035. LFS welcomes these measures and is also working with the City of Laredo Convention and Visitors Bureau to obtain a Film Friendly certification by the Texas Film Commission to help attract outside film production to Webb County. LFS is optimistic that these measures will result in greater filmmaking opportunities in South Texas. 

Using a carrot rather than a stick approach ensures predictability, fairness, and the avoidance of a costly trade war that can inadvertently hurt the U.S. film industry and diminish the movie-going experience for film lovers in both the U.S. and abroad.