Donald Trump wants to save Hollywood with a plan for new taxes, but does this help the film industry?

Last Sunday, President Donald Trump Hollywood surprised with a new intention: a 100 percent levy on films recorded outside America. What is the hot soup eaten? Trumps youngest tax front in five questions.

What exactly does Trump want?

On his social media channel Truth Social Trump announced Sunday a levy of 100 percent on films produced abroad. This is because « the film industry in America » ​​is currently « a quick death », which means « Hollywood and many other areas in America ». It would concern a threat to national security, because film revolves around ‘communication and propaganda’. And it would be a result of the policy of other nations to lure film production from the US with a generous tax deduction. In his beloved capital: « We want Movies made in America, again. »

What does Trump have with Hollywood?

A love-hate relationship. Hollywood gave the six-time bankrupt real estate magnate in the slop at the beginning of the 21st century via TV show The Apprentice A new life as a reality star and assumed super manager with the tagline: « You’re fired! » Trump has been fascinated by film fame all his life and arranged tirelessly coneos -Short guest appearances-for themselves in films and TV series.

Trump is very sensitive to rejection due to the nominal left -wing establishment of Hollywood, which keeps him remotely – unlike the tech sector. In January, just before his second inauguration, Trump named three reactionary movie stars to their own surprise to ‘ambassadors’ in Hollywood, in his words ‘a great but very troubled place’: Sylvester Stallone, John Voight and Mel Gibson. Voight, the father of Angelina Jolie, takes that seriously: this weekend he dinner with Trump in Mar-A-Lago and presented him a rescue plan that revolved more about tax deduction than about levies. This was followed by Trumps message.

Los Angeles, the heart of the American film industry, is, according to experts, in an ‘existential crisis’

Does Hollywood have to be saved?

Not so much Hollywood in the sense of ‘the big studios’. They usually keep their headquarters in Los Angeles, but produce where that is the cheapest.

Hollywood as a geographical place is indeed in heavy weather. The Californian governor Gavin Newsom, a political death enemy of Trump, will not be secretly against taxes. Los Angeles, the heart of the American film industry, is, according to connoisseurs, in an ‘existential crisis’ or even a ‘death spiral’ who can ‘make the next Detroit’ from the city.

For the past five years, the film industry has been struggling with Lockdowns, a decline of cinema visits – in the US it remains more than 20 percent below prepandemic level -, the collapse of streaming budgets, a large strike and forest fires. In the first quarter of this year, the number of shooting days of films passed by 22 percent, recording studios in LA are now empty more than a third of the time.

That ‘film flight’ from LA has been going on for much longer. None of Hollywood’s top hits from 2024 – Dune: Part Two, Wicked, Gladiator II, Deadpool & Wolverine – was admitted to LA. That is partly related to domestic competition; 38 US states spent $ 25 billion last year on tax benefits to lure film and TV productions. Atlanta has grown into a strong rival of Los Angeles, the state of Georgia offers 5 billion tax deductions per year. New York and Louisiana are spent $ 7 and 3 billion respectively in film and TV.

Does abroad contribute to the film malaise?

Many American film jobs disappear abroad. According to recent figures, the total film production in the US has shifted by 26 percent since 2022. Australia saw its film sector grow by 14 percent in that period, while Canada, the United Kingdom and Eastern Europe (Budapest) are also doing well. Netflix absorbs an estimated 75 percent of his ‘content’ outside the US.

In addition to excellent facilities, Broogland offers a generous tax deduction. In 2022, for example, Studio Universal received more than 100 million euros in the United Kingdom for his recordings of part of Jurassic World: Dominion In the Pinewood Studios. Successor Jurassic World: Rebirth -in July in the cinema-therefore, after outside recordings in Thailand and Waterstunts in Malta, for Scarlett Johansson, had a complete fake jungle built in Borehamwood, England.

Los Angeles drives mainly on television, but also that flight across the border: TV recordings were running in LA with 30 percent. For Studio Fox, it is cheaper for an average quiz show if The Floor Quizmaster Rob Lowe with a hundred American participants to fly to Dublin.

California is working on extra tax drivers, but whether that really helps? The Exodus from LA also hangs together with densely filled trade union rules, high labor costs and regulatory pressure. The fact that Hollywood’s studios in 2023 gone to the knees at the strike of writers and actors seems to have been a pyrrus victory for the trade unions.

Is such a film levy feasible?

A message on social truth is not a plan but a declaration of intent: Monday the shares of large studios such as Netflix, Disney and Paramount with 2 to 4 percent plummeted. However, a problem with taxes is that film is not a physical product but an ‘IP’, intellectual property. What exactly are you going to burden? Production is very decentralized and opaque, writing, management, recordings and post-production take place everywhere and nowhere-even to be able to take full advantage of scattered tax benefits. Naturally, exceptions must be added to a levy: Emily in Paris It is difficult to record in Fargo. What follows is probably a nightmare of chaos, disruption, back doors and exceptions.

Another problem is that the American film industry enjoys a major trade surplus – $ 15.3 billion in 2023 – and is therefore very vulnerable to retribution. If the US European films imposes a tax of 100 percent, then nothing will pay nothing attention to the EU to firm considerable income and thus to finance its own film industry.

Donald Trump calmed the minds on Monday with an explanation: he talked to the film industry to « make sure they will be happy ». An obvious option is that Hollywood will soon pacifies the White House by flattering Trump with cosmetic gests that can be presented as triumphs. Because that’s probably what it’s all about.

To share

Mail the editors