The international industry is reacting swiftly to the news US President Donald Trump is considering imposing 100% tariffs on all films produced outside of the US, “in foreign lands”.
Equity, the UK creative industries trade union, general secretary Paul W Fleming said: ”A lot of the panic over the past 24 hours is due to the fragility in the system. This can be addressed positively through properly funding our public service broadcasters and ensuring an attractive and fair tax and investment environment for studios and production.”
A UK government spokesperson said “calm” discussions were ongoing with the US. “Talks on an economic deal between the US and the UK are ongoing – but we are not going to provide a running commentary on the details of live discussions or set any timelines because it is not in the national interest.
”We will continue to take a calm and steady approach to talks and aim to find a resolution to help ease the pressure on UK businesses and consumers.”
The spokesperson also noted: “We are absolutely committed to ensuring these sectors can continue to thrive and create good jobs right across the country, and will set this out through a new Creative Industries Sector Plan to be published soon.” A late spring publication date expected.
Screen Ireland confirmed it is also working alongside the Irish government to safeguard the film industry’s international partnerships. “Screen Ireland is working closely with the Department of Arts, Culture, Communications, Media and Sport together with our industry partners in Ireland, Europe and the US as the current situation evolves.
”The film industry is a highly collaborative sector with international co-production at its core. Screen Ireland remains committed to the deep creative relationships that have been built with our US and international production partners.”
This sentiment was echoed by the British Film Institute (BFI). ”The BFI is working closely with the UK Government, and industry partners in the UK and US while we understand the detail of the proposal,” said a British Film Institute spokesperson. ”We want to keep collaboration at the heart of our sectors, so we remain a constructive partner to our friends in the US and internationally.”
A British Film Commission (BFC) statement emphasised the need to wait and see.
“While this announcement is clearly concerning, we need to understand the detail surrounding the proposed tariffs,” said Adrian Wootton, chief executive of the British Film Commission.
”We will be meeting with Government and our industry policy group in the coming days to discuss further. The UK and US have long enjoyed a strong, shared history of film-making, recently celebrating 100 years of creative collaboration and production. We look forward to continuing that for years to come, to our mutual benefit.”
Individuals pointed to the potential flaws of the proposed policy.
“Making it more difficult to make films in the UK is not in the interests of American businesses,” said Caroline Dinenage, Conservative member of parliament and chair of the UK parliament’s cross-party culture media and sport committee. “Their investment in facilities and talent in the UK, based on US-owned IP, is showing fantastic returns on both sides of the Atlantic. Ministers must urgently prioritise this as part of the trade negotiations currently underway.
Dinenage said the proposal underlined the need to support the UK’s homegrown industry. ”At the same time, the Government’s forthcoming Creative Industries Sector Plan needs to meet the challenge we set down of incentivising inward investment while also growing our domestic sector so British film and high-end TV can thrive.”
Freelancer concerns were at the heart of the response of Philippa Childs, head of Bectu, the union of freelance workers in the UK’s media and entertainment industries. “The UK government must move swiftly to defend this vital sector and support the freelancers who power it, as a matter of essential national economic interest.
“The UK is a world leader in film and TV production, employing thousands of talented workers, and this is a key growth sector in the government’s industrial strategy. These tariffs, coming after Covid and the recent slowdown, could deal a knock-out blow to an industry that is only just recovering and will be really worrying news for tens of thousands of skilled freelancers who make films in the UK.”
A CEO of a leading independent European distributor said, ”Right now it is still unclear how such taxes should be effected - if the taxes would be calculated from the MG/ the budget of the film or something totally different. Right now it is still ‘only’ a threat. And the ones who will suffer the most are the American arthouse audiences, and it will be a cultural loss that doesn’t generate more work in Hollywood. To say that taxes on a European arthouse film will lead to more films being produced in the US doesn’t make sense and hopefully that will become clear, when/if further investigations are done.”
One independent UK producer who spoke to Screen is currently shooting a feature that was originally intended to be filmed in the US, but was moved to the UK because ”it was quite simply impossible to make it in the US from a cost perspective.”
”Mr Trump’s new idea is not going to reduce the cost of making movies in the US, so it doesn’t address the actual problem,” said the producer. ”Given the amount of money that’s generated pound for pound from the UK tax incentives (over £7 GVA per £1 of incentive), you’d think he might consider similar incentives to bolster both the US film industry and the American economy.”
Australia and New Zealand
According to the Guardian, Australia’s home affairs minister Tony Burke said he had spoken to the head of the government body Screen Australia about the proposed tariffs. “Nobody should be under any doubt that we will be standing up unequivocally for the rights of the Australian screen industry,” he said in a statement.
Screen Producers Australia (SPA) has posted a statement that reads: “At this stage, it is unclear what this announcement means in practice or how it will be applied and implemented,” said SPA CEO Matthew Deaner. “There are many unknowns for our industry, but until we know more, there’s no doubt it will send shockwaves worldwide.
“For the Australian industry, it reinforces the need for the Government to focus immediately and swiftly on building a resilient local industry that can withstand global shocks like this.
“As we get set for our annual SCREEN FOREVER conference, set to start tomorrow, we’re certain today’s announcement will be the catalyst for many, many conversations between local and international industry executives and screen professionals.
“SPA will continue to monitor developments and await the Executive Order, which should provide further information on this,” said Deaner.
New Zealand prime minister Christopher Luxon told a news conference the government was awaiting further detail of the proposed tariffs. “We’ll have to see the detail of what actually ultimately emerges. But we’ll be obviously a great advocate, great champion of that sector in that industry,” he said.
Hungary
In Hungary, which is presently hosting the shoot of Walden Media and Weed Road Pictures’ Billion Dollar Spy, directed by the UK’s Amma Asante and starring Australia’s Russell Crowe, the initial response was sanguine.
“Hungarian soundstages are currently operating at full capacity with both international and domestic productions,” said Csaba Káel, government commissioner for the development of the Hungarian Motion Picture Industry.
”The formulation and implementation of potential US protective tariffs that could impact the Hungarian film industry is expected to be a lengthy process. In the meantime, we continue to engage in discussions with international partners across multiple continents to explore further opportunities for cooperation and co-productions that would benefit stakeholders in the Hungarian film sector.”
Spain
In Spain, where government incentives have provided a big draw for US production, the initial response from the Spain Film Commission was bullish. “Nowadays we have the privilege of enjoying the widest variety of films, series and audiovisual content in history, and this is possible, among other factors, because of a context of free international trade in the entire production and distribution chain,” it said in a statement.
”The solution to the problems the US economy might have won’t come from imposing barriers to North American productions that generate thousands of millions of revenue for the US. These barriers are very likely to trigger reactions that will end up in everybody losing out.
“Spain and the EU, in our opinion, must maintain a policy that is coherent with our values and our world vision. This means arguing solidly and rationally about the damage that this ramping up of tariffs causes all of us, companies and consumers in the US included; and establishing systems to ensure the protection of local production flow and promote new spaces of collaboration with audiovisual industries all over the world.”
Spain is one of the busiest locations for the international film industry. Inward investment in the country from international film and TV productions totalled $1.4bn (€1.3bn) between 2019‑22, generating $1.9bn (€1.8bn) in gross value added and a return on investment to the Spanish economy of $10 (€9) for every euro invested through the incentives programme.
The country is also a key base for international streamers like Netflix, that opened its first European production hub in Madrid in 2018.
According to the Spanish news agency EFE, the Minister of Culture, Ernest Urtasun, is going to meet up with industry professionals this Wednesday to analyse the situation and think of a course of action.
UK sales agents
Leading London-based sales agents began to digest the news on the eve of Cannes – and cautioned against panic.
“It sounds potentially disastrous for the international film industry,” said one. “America is our biggest market and one which leads the rest of the world. It’s unclear how the proposed tariffs would be implemented but if they apply to foreign independent productions to be distributed in the US the implications for our industry could be seismic.
”I do note, however, that we have absolutely no detail on this and would caution against panic as an immediate reaction to the news.”
“What a bombshell on the eve of Cannes,” said another. “It might never get into effect, but just the possibility of such a tariff will create unnecessary uncertainty towards the US market which was just starting to show positive signs of recovery after the strikes
“It could have the double deterring effect of affecting production finance of films that count on the US sale down the line as important collateral for financiers, and making import of foreign language films prohibitive.
“One can wonder how it affects global streamers like Netflix, whose business model is to produce locally, and exploit globally including in the core US domestic market,” they continued. “Would a show like Squid Game be taxed in the US for American subscribers to watch? or would it be taken off the service all together in America to avoid the tariff?”
Geoffrey Macnab contributed to this report.
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