After threatening 100 per cent tariffs on all foreign-made movies in May this year, US President Donald Trump has confirmed the same on Monday. However, he did not specify when and how the tariff will be enacted. When he does, this will be the first time that a US tariff is implemented on a cross-border service rather than goods.
Stating that filmmaking business has been stolen from the US like stealing "candy from a baby", he noted that California had been deeply impacted by this. To solve the issue, "I will be imposing a 100% Tariff on any and all movies that are made outside of the United States," said Trump on his Truth Social handle.
Details of whether these tariffs would apply for streaming services like Netflix, Prime Video and Disney, and how it would be calculated are yet to be known. The move is set to negatively impact regions across the globe as well as the filmmakers, especially in India as it derives significant revenue from the US and US-based directors seeking services from India. Europe, Asia and Australia who are also major players, will be equally impacted by the rule.
With theatrically distributed films across now counting as a digital service, the decision will impact every medium of movies and movie-related distribution. It is to be noted that filming for several TV shows usually happen in Toronto in Canada, Dublin and other parts of the world as foreign studios have given major tax breaks to studios to shoot outside of Hollywood.
The boundaries and rules are also currently unclear as the definition of an US-made movie changes with foreign actors, directors or funding coming into the picture.
Major films like Christopher Nolan’s The Odyssey and Dune: Messiah are in production outside the US. Avengers: Doomsday, which recently wrapped production and recent movies like Deadpool & Wolverine, Wicked and Gladiator II were also shot outside America. Imposing tariffs could largely backfire as the US box office has been struggling since the COVID-19 pandemic. Expensive ticket prices could only result in lesser footfall across theatres.
India's film industry will take a major hit given that most of its global revenue comes from the North American market. This includes theatrical, OTT, satellite and other rights sold in the US. Most Telugu and Hindi hits are also blockbusters across the US. Hence, these industries are also expected to pay the price for Trump's new move.
India's VFX studios, which employ cutting-edge technology to create animation for top companies like Disney, DreamWorks and Pixar will also be affected along with Animation studios in India who create TV series and films for Disney and Nickelodeon.
In May, Trump said that the movie industry in America is "dying a very fast death." "Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States. Hollywood, and many other areas within the U.S.A., are being devastated," he said,noting that this was a deliberate move by other countries and was a "national security threat".