Trump’s plot twist: Using tariffs to bring movies back to Hollywood

A few weeks ago, a conversation between actors Adam Scott and Rob Lowe went viral among industry professionals. The two were reminiscing on a podcast about their time on the comedy Parks and Recreation, which aired on NBC from 2009 to 2015.

“Do you think that if we shot Park right now, we’d be in Budapest?” asks Severance star Scott. “One hundred percent,” replies Lowe, who is currently filming his game show The Floor in Dublin. “It’s cheaper to bring 100 American people to Ireland than to walk across the lot to Fox, past the sound stages and do it there.”

The conversation briefly touched on one of Hollywood’s most pressing issues: productions have been moving abroad for years. This issue came to the forefront last week due to Donald Trump. The president threatened to impose a 100% tariff on productions made overseas to encourage the local industry to boost its business. “We want movies made in America again!” the president wrote on social media.

This decline can be measured by the number of film shoots taking place each day in Los Angeles County, home to most of the studios. The number of film and television productions has dropped by 22% in the first three months compared to the same period in 2024. This marks the lowest point since FilmLA began tracking production numbers in 2017 to gauge the industry’s health. The decrease is primarily due to cutbacks in the number of productions by companies and the wage hikes following the recent Hollywood strike.

There is little clarity and few details about the president’s initiative. Last Monday, Trump said that he would soon meet with the film industry and that his proposal was not intended to harm the sector. He made this remark after his message on the Truth Social platform caused stock losses for studios and streaming platforms. However, the losses were recovered in the following days.

Trump’s mission to revive Hollywood was picked up by California Governor Gavin Newsom, who proposed that the federal government collaborate on creating a $7.5 billion subsidy for “Make America Film Again.” But Newsom’s proposal was not well received at the White House: President Trump called the Democratic governor as “a grossly incompetent man.”

Meanwhile, actor Jon Voight, one of Trump’s ambassadors in Hollywood, envisions a similar future for the industry. The Midnight Cowboy star is advocating for Washington to adopt a 10% base tax credit and a one-year extension on tax payments for productions that hire 75% U.S. workers.

The credit proposed by Voight, following a series of talks with industry unions, could increase if filming takes place in economically depressed areas and could be combined with other credits offered by states, according to the proposal Voight presented to Trump at his Mar-a-Lago residence in Florida. If a producer chooses to take their project abroad despite these incentives, they would face a 120% tariff on the amount received overseas, reported Deadline, which had access to details of Voight’s initiative.

For those familiar with the industry, it is feasible for productions to return to Hollywood. “The savings from productions abroad can be significant, but there is strong resistance among talent [actors and directors], writers, executives, and producers to go to other countries. In the end, they’d prefer to work an hour from home and go home to sleep,” says Rodrigo Mazón, a former executive at Televisa’s digital platform Vix.

To address the decline in California, Newsom proposed in October doubling the state’s film and television tax incentives to $750 million annually. The state Senate is set to debate the program in the coming weeks. If approved, this would position California at the forefront of incentive programs, a spot currently held by New York.

California lawmakers are racing against time. Around 37 states offer tax incentives, and several, like Georgia, are fine-tuning their programs to attract even more productions. Georgia, already dubbed the “Hollywood of the South,” has become a popular location for shows like The Walking Dead, Stranger Things, and Ozark. Voight believes California can no longer compete with Georgia, which imposes no cap on its incentives.

In January, actors Matthew McConaughey, Woody Harrelson, Renée Zellweger, and Billy Bob Thornton launched a campaign to make Texas the new movie capital, offering $498 million in film incentives. Of this amount, $48 million would be allocated for smaller films and TV commercials. The True to Texas campaign was unveiled with an ad directed by Nic Pizzolatto, creator of True Detective. It made a significant impact in Hollywood, but was also criticized for showing little solidarity with Los Angeles, as it coincided with the devastating wildfires in the city.

Some executives believe the problem isn’t the tax credits themselves, but the difficulty in accessing them in California. “The issue becomes when you’re trying to plan,” said Casey Bloys, president of content at HBO and the Max platform, last week. “You have to get into a lottery, and you’re not sure if your show is going to get the tax break or not. That uncertainty makes it very difficult, especially when you compare it to Atlanta or Canada,” the executive pointed out during a forum.

Incentives have become a key factor in determining where a production will be filmed. A Mexican producer with experience working with Netflix and Disney, who wishes to remain anonymous, explains how these incentives are crucial for reducing budgets and even allow for refunds. Some incentives are conditioned on hiring local labor, and they don’t apply to post-production processes done with artificial intelligence.

These incentives can also change a production’s story. The producer shares how his company modified a road movie originally set in the United States to ensure the route passed only through states that offered tax credits. In the end, the project didn’t move forward, but this is why many productions now film in Toronto as if it were New York or use Louisiana as if it were a northeastern state.

The competition is global. Canada offers a base federal tax credit of 16%, which can be combined with additional credits in provinces like Quebec, which offers 25%. Spain’s Canary Islands have one of the most attractive tax credits worldwide, offering refunds of up to 54% for any production that invests at least $1 million in the community. In Europe, 32 countries offer these incentives. Ireland offers a 32% rebate on up to $75 million, while the Czech Republic reimburses up to 66% of taxes for foreign actors and technicians.

This system, the producer emphasizes, has made it very difficult to determine exactly what constitutes a “foreign film.” “Would a film written in one country, shot in another, and digitally retouched in a country like India [the animation capital of the world] pay tariffs?” he asks. The question remains unanswered, pending the details of Trump’s plan.

Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition