The Problems That Trump's Hollywood Tariffs Wouldn't Solve - The Atlantic
Observers couldn’t quite tell what the explicit target was—American movies filmed overseas? International films seeking American distribution? Questions also arose as to whether such tariffs could even be enforced, or what form they could take. Despite the confusion, the proclamation still seemed potentially devastating to many: “This is an ‘everyone loses, no one gains’ policy,” one producer said of the possible fallout.
Like many a Trump statement made via social media, it was pulled back in fits and starts over the following days. A White House spokesperson said that “no final decisions” had been made on the tariffs. One day later, Trump told reporters, “I’m not looking to hurt the industry; I want to help the industry.” Three days after that, when announcing a trade deal with the United Kingdom, he clarified that “James Bond has nothing to worry about” and then mused on his personal friendship with the late actor Sean Connery. Those decrying the onset of new injuries to an already hobbled market could relax, at least for a moment. But there is an underlying existential panic that Trump is seizing on: that many of the biggest American films are not being made in America anymore.
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Perhaps that reality is why some of the major industry unions reacted to Trump’s post with muted support. “SAG-AFTRA supports efforts to increase movie, television and streaming production in the United States,” the actors’ guild said in a statement on May 5. “We look forward to learning more about the specifics of the plan announced by the President and to advancing a dialogue to achieve our common goals.” The below-the-line crew members’ union wrote that Trump’s plans would need to “do no harm” to the industry’s current operations, but it indicated agreement that Hollywood requires buoying. “Foreign governments have successfully lured film and television productions, and the multitude of jobs they create, away from the United States with aggressive tax incentives and subsidies,” the union’s statement reads.
Not long after Trump’s post, someone else claimed responsibility for its origins: the Oscar-winning actor and Trump supporter Jon Voight, who has been tapped by the president to explore ways to bolster the American film and television industries. The president’s tariffs comment was reportedly plucked from a wider list of recommendations drafted by Voight; the actor’s business partner, who served as an adviser on the plan, stated that it was “crafted solely for the purpose of discussion.” But the tentative list of solutions does have somewhat concrete recommendations in it, codified after Voight took meetings in Hollywood with unnamed industry figures. Levying tariffs on works created abroad is just one part of the package of ideas, which range from the fanciful to the practical, that he presented to the president.
What people on both sides of the political spectrum have jumped on is the general idea of offering financial support to reinvigorate film production in Hollywood. The longtime focal point of cinema has lost a lot of opportunities to the rest of the world: There are other major American hubs, including in Georgia and New Mexico, but plenty more in regions such as Europe and Australia, where tax incentives are plentiful and labor is often far cheaper. Even if an American movie is made in the U.S., various elements of postproduction, such as visual effects, may still take place outside the country—as with so many other industries, the many forces of globalization can be tough to combat. California Governor Gavin Newsom, hopping on the news cycle, proposed a $7.5 billion federal tax credit to motivate studios to create more work locally, which would be many times larger than anything currently offered at the state level.
In his plan, Voight suggested something along these lines too: a 10 to 20 percent federal rebate that would stack with any existing state credits. On the punitive side, American productions that took advantage of overseas tax breaks would be subject to a tariff “equal to 120% of the value of the foreign incentive.” Voight’s outline doesn’t specify how those tariffs would be imposed; perhaps the studios would be able to absorb the cost themselves, but if not, it’s hard to imagine that they would charge more for certain theatrical releases just because they were filmed in Europe, for example. Voight also proposed that all subsidized projects “meet a minimum threshold AMERICAN ‘Cultural Test,’” an idea borrowed from programs in places such as the U.K. that funnel government money toward domestically made works that benefit the country in some way.
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The U.S. is the world’s chief exporter of movies, which rank among the country’s most definitive, most abundant global offerings—and it’s doubtful that producing them elsewhere is affecting the country’s stronghold. Filming locations are rarely considered a matter of national pride, let alone taken into account for nonfinancial reasons. The lack of protectionism, however, could be part of why jobs have slipped away from Los Angeles. And tariffs could potentially encourage studios to film some projects in other, less expensive locales throughout the country, although even those costs, at present, typically exceed those in other nations. But it’s also possible that such a plan would make the industry less vigorous. Studios—which are already struggling to bounce back from the coronavirus pandemic and multiple strikes in a splintered media landscape—could be disinclined to go forward with certain projects at all, if the costs or penalties seem prohibitively high.
The relevance of other proposals in Voight’s package felt less obvious, including a push to restore a now-defunct set of TV-broadcasting regulations. It’s unclear why Voight and his team have alighted on that extinct initiative, although—as with the potential tariffs—some industry professionals saw the positives in reintroducing these regulations. And that’s the thing about the desire to “make Hollywood great again”: There’s no consensus on what the best course of action is to stimulate the film industry. The divergent opinions leave open space for Trump’s emissaries to get a hearing and start rocking the boat. But even Voight himself seems to have reconsidered the best way to steer it: On May 11, the actor and several industry union leaders submitted a letter to Trump insisting on the need for tax incentives, not tolls.
The issue of how outsourcing jobs affects the economy is obviously a valid one. It’s just that, when it comes to American filmmaking, it’s neither novel nor of the greatest consequence to the industry’s health; decades have passed since the age of New Hollywood, when it seemed like every production was happening in the L.A. area. Perhaps the more pressing concern, especially to domestic audiences and studios, should be the decline of theatergoing. Instead, Hollywood is busy reckoning with new alarmist proclamations.
David Sims is a staff writer at The Atlantic, where he covers culture.
