Movie Tarrifs

[Martin McCaffery]

Posted without comment: bafkreic3ora7klrch6n34vmh6vrk4o7bi3s7sewpgbghzsnsqro6hjfk3y.jpg

[Harold Hallikainen]

Interesting. I see it also on Reuters at https://www.reuters.com/business/med...us-2025-05-04/ .

Here's what Google AI says about tarriff's on digital goods:

Currently, tariffs on digital goods are largely prohibited under international agreements like the World Trade Organization's (WTO) moratorium on electronic transmissions, according to a report from DUPERRIN.COM. While there's been some debate about imposing tariffs on digital services in retaliation for other countries' digital service taxes, no such tariffs have been implemented, as explained by Bloomberg News.
Elaboration:

• Digital Service Taxes:
  Some countries have introduced digital service taxes, which are levied on digital platforms and services. The US President Trump has responded to these taxes with potential retaliatory tariffs.

• Challenges of Digital Tariffs:
  Implementing tariffs on digital goods faces significant challenges. Determining the origin and value of digital goods can be difficult, and the global nature of the internet makes it hard to enforce tariffs.

• Potential Consequences:
  While tariffs on digital goods are not currently in place, their potential implementation could lead to increased costs for businesses and consumers, potentially impacting the growth of the digital economy.

• WTO Moratorium:
  The WTO's moratorium on electronic transmissions, established in 1998, prohibits member states from imposing customs duties on digital goods like software, data, and online services, according to a report from DUPERRIN.COM. This has been renewed periodically, including an extension until 2026.

[Scott Norwood]

How would this even work for cinemas? Film rental goes from 50% to 100%?

[Marcel Birgelen]

So, how exactly is this going to entice Hollywood to produce more movies? Are those tariff being donated back to Hollywood or why would Hollywood now suddenly want to start to produce more movies?
What does this mean for e.g. special effects that are (partially) produced in other countries? So, essentially, everybody except the government is getting screwed, especially the American exhibition industry and the American consumer, but surely this will help to mak America Great Again... Man, bending your mind into a pretzel to make this MAGA logic work, really hurts my brain...

Sorry for being "political", but I guess it's getting harder every day not to be so, given the general idiocracy and self-inflicted flesh wounds on full display every day...

[Martin McCaffery]

Of the top five movies this week (from Comscore and IMDB)

Thunderbolts: Country of Origin: USA Shot in: Merdeka, Kuala Lumpur, Mayaysia

Minecraft: Country of Origin: Sweden United States New Zealand Canada.
Shot in New Zealand Production Company: Warner Brothers (USA)

Sinners: Country of Origin: United State, Australia, Canada Shot in: USA, Production Company: Warner Bros

The Accountant 2: Country of Origin: USA Shot in: Hollywood! Production Company: Amazon MGM

Until Dawn: Country of Origin USA, Hungary Shot in: Hungary Production Company: Screen Gems (Sony).


Is there a tariff on each piece of the movie? If it is an American distributor is it exempted? What is the core number that the tariff is based on? If it is really a foreign film, tariff based on distribution rights?

This is going to make standard crooked Hollywood Bookkeeping look like accounting 101.

Will the MPA add "of America" back into their name?

[Scott Norwood]

What about all of those Disney films that say something about "this picture was produced in the United Kingdom for copyright and business purposes" or some such?

[Leo Enticknap]

The decline of production activity in "Hollywood" (by which is meant Southern California more generally), has become a hot local topic in recent months, with taxation and regulation getting a lot of the blame; and not just from those political quarters that you'd expect to criticize taxation and regulation. One producer was interviewed on a radio talk show last week, claiming that it was literally cheaper to fly a cast and crew to Ireland or Romania than it was to have them shoot on a sound stage on the Paramount lot. In response, the city and county government is lobbying the state to offer new tax breaks for local media production. Whether this will happen any time soon is far from clear, especially given that California is running a budget deficit in the tens of billions this year. For this reason, and sorry if the following comment is overly political, but I would speculate that the motivation behind the tariff announcement is to encourage domestic movie production, but also to encourage it to relocate from Hollywood to red states.

Agreed with others on the practicalities of imposing and collecting these tariffs. While tariffs weren't the instrument in most cases, using a nation's legal system to protect indigenous film production and discourage the distribution of foreign films has been done in several other countries. It was always unsuccessful at keeping Hollywood out (apart from in Nazi Germany, the USSR, and most of Eastern Europe during the Cold War, and only then because these jurisdictions outright banned the screening of imported American movies), and a partial success at best in promoting local film industries. I believe that France imposes a ringfenced tax on all cinema admissions, the proceeds from which go to government-run film studios. In the middle of the last century, the UK imposed a quota of domestic films that cinemas had to play in order to be allowed to play Hollywood films. The result was a few blockbusters that lost a lot of money because the domestic market was simply not big enough to enable them to make a profit, and an avalanche of shitty B-movies that were mostly paid for by the Hollywood distributors, and shown early in the morning while the cleaning crew worked. Needless to say, this legislation required a definition of what was and wasn't a British film, and its authors came up with a convoluted, loophole-ridden one.

All the same problems apply here. The first problem, as Martin points out, is to define what is and isn't an American movie for tariff purposes. Then you have to figure out how and where you impose the tariff. Streaming would be a very difficult aspect to this, because it's impossible to quantify how much money an individual piece of "content" makes, if customers pay a flat monthly fee and then decide what they do and don't watch during that month. I suppose that you could impose, say, a $1 per view flat tax, but the costs of collection and record keeping would be enormous, with the streamers fighting them tooth and nail.

[Marcel Birgelen]

The decline of production activity in "Hollywood" (by which is meant Southern California more generally), has become a hot local topic in recent months, with taxation and regulation getting a lot of the blame; and not just from those political quarters that you'd expect to criticize taxation and regulation. One producer was interviewed on a radio talk show last week, claiming that it was literally cheaper to fly a cast and crew to Ireland or Romania than it was to have them shoot on a sound stage on the Paramount lot. In response, the city and county government is lobbying the state to offer new tax breaks for local media production. Whether this will happen any time soon is far from clear, especially given that California is running a budget deficit in the tens of billions this year. For this reason, and sorry if the following comment is overly political, but I would speculate that the motivation behind the tariff announcement is to encourage domestic movie production, but also to encourage it to relocate from Hollywood to red states.

Instead of relocation, if any of those measures is only further going to increase the production cost of a Hollywood movie, then this will only further speed up the move to AI-based content production. The amount of progress that has been made in this field in just the last two years is pretty daunting and should everybody give a few moments to think.

As for Hollywood being too expensive to shoot movies nowadays, that's kind of ironic, as the sole reason for Hollywood having been THE location for "content production" was the fact that the highly integrated industry in one place made it more cost effective to do it there than anywhere else...

Tariffs and taxation in general, on digital goods has always been a difficult topic and that's why most of the trade agreements of the last 25 or so years generally avoided them. Digital goods themselves have almost no intrinsic value, as they can be replicated as many times as you want for zero to very little cost. Therefore, the way to make money on those goods is by distributing usage licenses to those goods. The way you value a license can be extremely flexible. Almost no jurisdiction around the world forces you to sell licenses based on real costs, as those costs are almost always impossible to quantify. So, it's very easy to sell a particular piece of digital content for "zero or near zero" between two entities, that way, you can easily circumvent most of those tariffs and taxes. It's the same way those big companies already operate. If I buy a song from Apple, they pay taxes to Ireland, not to the U.S., not to the local government...

As for the political part, I'm afraid we're so far down the rabbit hole, it's hard to entirely avoid it. It's clear that this is one of the many spontaneous 3 A.M. populistic brain farts nobody of those in charge really has given any second of reflection towards reality.

[Mark Gulbrandsen]

How would this even work for cinemas? Film rental goes from 50% to 100%?

Tickets will go from $12.00 to $24.00 or more...

Let us not forget that one of his Wharton professors said he has an IQ of about 73. The White house does have a theater. It's actually been on the news a couple of times in the past. But if only he knew that the streaming part and the short window to it is a big part of the issue, then he might be able to help. What he is proposing will likely shudder a lot more theaters.

[Ryan Gallagher]

I think staying a-political is off the rails with actions that so directly affect our industry. lol. At least for one thread.

Reading the real intent behind any of this US Admin moves is like trying to read tea leaves. Often you are best served by viewing it from a leverage/extortion lens. Such as how his universal tariffs and pause are expecting countries to come begging to him to make deals for exemptions, that may or may not work without imploding the US economy first, that benefit either the US, the President Himself, his family, or his circle of currently in favor friends (Order of priority there is greatly up for debate).

One can only speculate that the film industry tariff directive has a somewhat similar intent, although clearly much harder to implement from a digital goods, origin, and value perspective. But what kind of deals would he hope to get from these foreign film entities to enable tariff free US markets? More favorable treatment of himself and the US, basically propaganda influence abroad? Get more foreign origin films shot here? Recall many films that shoot elsewhere for financial reasons? Get foreign studios to make pro-US aligned propaganda for their markets?

Hollywood has always had a fairly liberal leaning, and it does not shock me at all that he would pick on this industry as one of the "foes" in some way shape or form, though I am not sure that is what is happening here. Perhaps more a litmus test, to see who will oppose him and who will fall in line. That thought about pushing hollywood towards red states is perhaps loosely connected but I don't see foreign tariff mechanism as really moving that needle? It could also simply be that one of his advisers or hive mind of followers pointed out that film as a product and industry is perhaps except from his existing tariff proposals because of the digital goods loopholes?

You also have to put some weight on the choice of words in the post (as difficult as that can be to interpret), the only statement so far, with all that talk about national security. It's not about business security of hollywood studios. It's not protecting the US's tendency to dominate the global movie/culture market (reciprocal actions will certainly shrink that). Perhaps what it is really about is controlling the narratives. Letting fewer divergent anti-US or specifically anti-Trump viewpoints into our cinemas and on our screens. He probably feels he has some influence already over US media, but he has no control over the outside media... so best just to push it out or get them to deal with him directly. Arts and Entertainment are about as far removed from a "National Security Threat" as you can get, unless of course you are an unpopular regime with associated concerns about public opinion and foreign propaganda? History has all those lessons.

Just more isolationism basically. More Authoritarian playbook stuff, but also more romanticizing a earlier bydone-era in the US, when US films were almost all we saw, and dominantly produced at the handful of Hollywood studios. Many decisions can also be seen in that lens, trying to re-create a subjective "golden years" of US industry (and now media), by use of a very crude tool. In general he has a Tariff fetish too, having also romanticized an era before income taxes, when Tariffs were one of the principal mechanisms to fund federal governments.

[Mark Ogden]

All of this is about as workable as reopening Alcatraz to prisoners, which he is also calling for. He's just pulling things out of his fat jingo ass at this point. I wouldn't worry about it.

[Frank Cox]

One way this could be calculated would be on production costs.

$X was spent making this movie in the USA and $Y was spent on making this movie in all other countries.

So there's a 100% surtax to be paid on $Y.

[Ryan Gallagher]

One way this could be calculated would be on production costs.

$X was spent making this movie in the USA and $Y was spent on making this movie in all other countries.

So there's a 100% surtax to be paid on $Y.

The trick is, at least when some or all crews are imported... the foreign costs may actually be quite minimal. These other countries often incentivize this work because of the ancillary benefit and business having all those people around brings. Actual production costs might be a tiny subset of the money expended while the shoot was in the other countries, and countries that still want to host them in a tariff free way could probably easily find workarounds to bring that paper cost down to 0$.

[Mark Gulbrandsen]

The trick is, at least when some or all crews are imported... the foreign costs may actually be quite minimal. These other countries often incentivize this work because of the ancillary benefit and business having all those people around brings. Actual production costs might be a tiny subset of the money expended while the shoot was in the other countries, and countries that still want to host them in a tariff free way could probably easily find workarounds to bring that paper cost down to 0$.

In a lot of cases Production chooses to shoot foreign to save money, but as often the production calls for a foreign setting (s), like the Bond movies. So it will be interesting to see how they decide to calculate all this.

[Frank Cox]

Then you could use assigned values, I suppose.

The labour rate for occupation Y in the US is $X. Therefore, the work in countries other than the USA is valued at $X per hour for purposes of taxation.

Hours worked x assigned value = 100% tax payable.