First it was steel, then it was cars, now it’s movies. The list of industries deemed critical to safeguarding U.S. national security grew longer on Sunday after President Trump declared plans to impose 100% tariffs on movies produced abroad.
The president argued Tinseltown has been “devastated” by countries that offered studios incentives to shoot on location.
“This is a concerted effort by other Nations and, therefore, a National Security threat,” he said, implying foreign films could impose alien views antithetical to American values. “It is, in addition to everything else, messaging and propaganda.”
Electric vehicles assembled in the U.S., for example, might be deemed imports if they rely on battery cells—the single biggest cost in the bill of goods—that are imported from China.
How this same approach might apply to films to determine their economic nationality is unclear. There is trade protectionism, but it takes the form of non-tariff barriers such as quotas and mandates designed to serve domestic audiences or promote specific culture.
Under the Constitution, only the legislative arm of the government has the authority to ratify trade deals and when necessary restrict the flow of goods and services via tariffs. There is however an exemption permitting the executive branch to intervene in trade when there is a threat to the safety of the country.
Trump has regularly relied on this exception. In his first 100 days, he has imposed sectoral tariffs in addition to his so-called “reciprocal tariffs” on countries without seeking the consent of Congress.
“Other nations have been stealing the movies, the movie-making capabilities from the United States,” Trump told reporters later. “I said to a couple of people ‘what do you think?’. I’ve done some very strong research over the last week and we’re making very few movies now, Hollywood is being destroyed.”
Protecting Hollywood from foreign competition may surprise many observers, since it is considered a Democratic stronghold often viewed with suspicion by Trump’s MAGA base. But it has indeed taken a recent hit.
The World Trade Organization declined to provide a statement, telling Fortune it does not comment as a general rule on the policies of its individual members.
Whether tariffs are an effective policy to answer Hollywood’s deeper problems and usher in the return of its golden era remains speculative.
Stephen Wolfe Pereira, a former media executive with Spanish-language broadcaster Univision, called the idea that U.S. national security is threatened by the film industry’s decline “bogus”.
Moreover, the real threats to the industry may not be found in other countries, but elsewhere.
That is not the only structural headwind Hollywood faces, either. User-generated content on social media sites like TikTok regularly outcompetes studios for consumer attention.
“The whole rise of digital technologies [and] alternative means of entertainment,” Wolfe Pereira said, “those are much bigger threats to the traditional Hollywood ecosystem.”
