Americans make their movies overseas because union rates in the US are too high. It’s probably better to let the industry die and then reform itself without the ultra-high labor rates.
It's more complicated than that, and I think Trump may be on the right track here -- although a blanket 100 percent tariff on foreign made films is misdirected. The legitimate issue is major subsidies by foreign governments to favor domestic producers and bribe American companies to shoot movies and shows abroad. This is classically predatory. We would have no problem identifying it as predatory if this were widget manufacturing, agriculture or ... well, name any sector you like. So how should the USG respond?
The problem with across the board tariffs is that they are too broadly drawn. They do not distinguish between good and bad actors. They are narrowly protectionist, which is immediately adjacent to legalized corruption, rather than retaliatory. Negotiations should move immediately into these finer, proportional distinctions because the goal is fair trade, not protectionism for the sake of protectionism. The latter ends up protecting abusive, collusive or monopolistic practices among domestic producers. SAG-AFTRA is no different from the UAW. We should not be in the business of protecting industry cartels cutting deals with union bosses at the expense of rising, non-unionized competitors and consumers. Any freeper who wants to cheer for across the board tariffs to protect the U.S. automobile industry -- which means protecting the UAW and its collusive deals with GM and Ford -- should have no objection to Trump giving Hollywood moguls the same deal. But in the long run, this is a mistake.
Note that film production has been moving especially to places like Canada and Europe, with the Japanese and Korean film industries gaining traction in U.S. markets as well. These are not impoverished, low wage countries competing on the basis of sweatshop coolie labor. They are high cost jurisdictions that are, in the case of Ireland, the UK, and Europe, are competing with high cost U.S. locations on the basis of escalating government subsidies, not inherent economic merits. In the long run, once government starts doing this, the pols will expect something in return ... so here's the DEI checklist and the mandated Overton Window regarding what the local Ministry of Culture is willing to support. Wanna do business here? Dance to our tune. We'll send over some minders to approve your scripts and casting decisions.
The film industry has a lot of problems of its own making. (So does the auto industry ....) It is not the business of the government to paper those over with protectionism. Aside from the union problems, California has gone off the rails on taxes and regulation of many kinds, and it currently has one of the most hostile business climates among the various states. Geographically mobile businesses have been fleeing California for years. So has the film industry, with major film production hubs developing elsewhere around the country.
This gets complicated as well, because some of the growth of these other domestic hubs is driven by state subsidies of dubious merit. On principle, I hate to see states create hostile business climates and then start bribing favored industries to stay. This ends up with bankrupt, overtaxed cities coughing up billions in sweetheart deals to build NFL stadiums for billionaire owners. That's corrupt, and we're so deep into that game that we are very close to normalizing crony capitalism, in which doing business becomes dependent on sucking up with the local politicos. NFL owners shuldn't be subsidized. Neither should Hollywood moguls and movie stars -- and in the film industry today, Apple, Amazon, Disney and other corporate conglomerates are among the major beneficiaries. It is arguably one thing to give a helping hand to tiny little indie studios in the way we might support small business incubators in other sectors; it is something else to subsidize hugely profitable glocal conglomerates.
There is the added wrinkle in movies of wanting to shoot on location. That has a lot of intrinsic merits unless we are satisfied with transitioning to an industry that shoots entirely on soundstages with greenscreens and everything being dropped in by CGI. I have no objection to a U.S. studio shooting something abroad if there are artistically or commercially legitimate reasons for doing so; the line is crossed only when extraneous government subsidies are introduced. Trump should be willing to make those distinctions.
The immediate problem to which Trump is legitimately responding is huge production tax credits for filmmakers provided by various foreign governments. But there is a heck of a lot more that needs to be added into the calculation.
Trump is wrong on this. It IS dying in America - and NEEDS TO. They don’t make anything worth watching.