Trump is worried about national security because of films
Hollywood is in uncertainty.
The article was originally published on Aktualně.cz
US President Donald Trump He also extended his business policy to the film industry.
In his Sunday contribution on the Truth Social network, he announced that he had instructed the introduction of a CLA of 100 percent on films made outside the United States. The aim of this step is to return film production to America.
However, experts warn that Trump’s plans could have the opposite effect.
« The film industry in America dies very quickly, » Trump wrote, calling for decisive steps. « We want movies to be made again in America! »
He said that newly introduced duties will apply to all films made abroad, which will then go to the United States. Including those involved in American film studios.
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The problem is that films are not common goods. From a legal point of view, they belong to the category of services to which traditional duties do not apply. In addition, much of Hollywood productions are filmed outside the US.
The reasons are prosaic: foreign sites offer generous tax relief and lower labor costs. Cities such as Toronto, Dublin and Cape Town have become popular destinations for filmmakers in recent years.
The irony is that Trump’s measure also affects Hollywood himself. If duty came into force, it could ultimately apply to American films. And this would radically increase their budgets.
Hollywood in uncertainty
A typical example is the film « Mission: Impossible – the last defiance », whose production cost approximately $ 400 million.
One of the most expensive films in history will be premiered at the Cannes Film Festival, which begins on May 13. Most of the film with Tom Cruis in the lead role was shot outside the US – in the United Kingdom, at Malte. in Norway and South Africa.
If the film was subject to the proposed duties, the American film studio Paramount would have to pay another $ 400 million, twice its current budget to bring the film into American cinemas.
The result would probably not be increased income for the US Treasury, but the abolition of the entire production.
Analysts believe this is the main risk. Up to half of the production of American films are shot outside the United States and a quarter is completely foreign. The introduction of tariffs would be paralyzed and limited by the competitiveness of American studies.
Critics say that instead of « saving Hollywood », Trump’s designs could even further destabilize the entire ecosystem. Moreover, the step of the new White House boss comes at a time when trade wars are an extremely sensitive topic.
Echo pandemia
Hollywood is still recovering from a pandemic. While in 2018 they reached almost $ 12 billion in US cinemas, in 2020 they fell – as a result of cinema closing – to only two billion.
Although traffic is growing again, the number of projections remains half -compared to the period before Covid’s pandemic.
While streaming services help to keep the industry above the water, most of them are still loss -making – with the exception of Netflix and the latest Disney+ and Max platforms.
Trump justifies his decision by being a « coordinated attack by other countries », which he believes threatens the US national security. « It is besides everything else, the spread of messages and propaganda! » Trump added.
Duties have been a fiasco in the past
Moreover, history shows that similar interventions have already brought a financial disaster. In 1930, the so-called Smoot-Hawley duties entered into force, which introduced duties to import foreign films to the US.
As a result, the import of European films decreased by a fifth, while foreign sales in the US fell even more significantly – 35 to 40 percent.
American cinemas have lost their profits from popular European films, and Hollywood himself soon called on the cancellation of these measures, which happened in 1934.
Trump’s introduction of 100 % duties on foreign films could thus have a destructive impact not only on American film production, but also on international cultural and business relations.
In addition, investors who are considering financing Hollywood films today will have to reconsider whether such a risk is at all worthwhile. Because, as often as Trump’s business policy shows, the biggest threat is not the duty itself, but the uncertainty it brings.
