Trump’s proposed tariffs on Hollywood threaten to destabilize the global film industry, which relies heavily on international partnerships and overseas audiences.
The Global Nature of Hollywood: Why Trump’s Proposed Tariffs Are a Recipe for Disaster
The idea that movies are purely American-made is a myth. In reality, modern filmmaking spans across borders by necessity. Visual effects come from London, sound mixing from Toronto, financing from multiple international partners, and so on. Slapping tariffs on this intricate global ecosystem threatens to destabilize already precarious production economics.
The global film industry is a multibillion-dollar market, generating over $40 billion in revenue annually.
The film industry employs millions of people worldwide, from actors and directors to producers and screenwriters.
According to the Motion Picture Association of America (MPAA), the global box office has seen a steady increase in recent years, with international markets driving growth.
In 2020, the top-grossing films globally came from countries like China, Japan, and South Korea.
The Global Reach of Hollywood
The theatrical film industry has been particularly pummeled. Box office revenues remain stubbornly below pre-Covid levels, with global figures dropping from a record $43.3 billion in 2019 to just $30 billion last year. Domestically, despite hopes for a bounce-back, 2025 projections hover around $9 billion, according to The Numbers—a far cry from the reliable $11 billion floor_ the industry enjoyed throughout the 2010s.
The global box office has experienced significant growth in recent years, with worldwide revenues reaching $42.5 billion in 2019.
The United States accounted for approximately 39% of the total revenue, followed by China at 15%.
Blockbuster films such as 'Avengers: Endgame' and 'The Lion King' contributed to the surge in ticket sales.
According to a report by Box Office Mojo, the global box office has seen an average annual growth rate of 5.4% since 2010.
A Hail Mary Approach
Trump’s proposed tariffs are less a solution than a Hail Mary aimed at an impossible equation. Major studios are collectively releasing 10 to 15 fewer wide releases per year than they did before the pandemic, as box office revenues continue to struggle. The theatrical film industry has been particularly hard hit, with global figures still below pre-pandemic levels.
International Backlash
The greater danger may lie abroad. Even before Trump’s post, China had announced plans to further restrict American films—moves that could inspire other countries to follow suit if tariff tensions escalate. For an industry that relies heavily on overseas audiences, this spells disaster. Before Thunderbolts, the Marvel Cinematic Universe had generated 56.2 percent of its gargantuan $31 billion in global ticket sales from international markets.
With a rich history dating back over 3,000 years, China has emerged as a global powerhouse.
The country's economic growth has been rapid, with GDP increasing from $150 billion in 1978 to over $14 trillion today.
China is the world's largest trading nation, with a significant impact on global trade and commerce.
Its strategic location, vast population, and growing economy have made it an essential player in international relations.
Alternative Approaches
Not everyone sees tariffs as the answer. Actor Jon Voight and his manager Steven Paul have reportedly pitched Trump on expanding federal incentives for domestic production instead—supplements to existing state-level tax breaks, according to Bloomberg. Entertainment Strategy Guy suggests another approach: limiting subsidies provided by different states so production can benefit from economies of scale in only one to three locations.
The Consequences of Tariffs
New trade barriers could devastate studios still reeling from the arsenal of curveballs thrown their way over the last five years. For an administration concerned with American economic strength, triggering the collapse of one of the country’s most valuable export industries would be an unexpected plot twist—and not the good kind.
The Value of International Distribution
International theatrical distribution is crucial for an industry that relies on overseas audiences. Any reduction, limitation, or slowdown in international theatrical distribution will have damaging ripple effects on an already limping film industry. Foreign governments have several retaliatory options: increased taxes on American content, tighter quotas or demands for significantly more local-language production in exchange for market access.
The Importance of Finding a Solution
The best way forward would be to explore alternative approaches that address the complexities of modern filmmaking. By working together with international partners and finding innovative solutions, Hollywood can continue to thrive as a global industry. Anything less could spell disaster for an industry still struggling to recover from the pandemic.
