U.S. President Donald Trump’s renewed threat to impose a 100% tariff on all movies produced outside of the country could upend the global industry — and deliver a heavy blow to Britain’s already fragile sector.
The White House leader first announced duties on movies produced outside the U.S. in May this year. He than reiterated the issue in September, writing in a post on social media that other countries have “stolen” the movie-making business from the U.S.
The U.K.’s film industry has already faced multiple challenges in recent years from Box Office sales struggling to recover their pre-pandemic levels to rising competition from streaming platforms, the SAG AFTRA strikes and now the threat of film tariffs.
Gurinder Chadha, director of blockbuster movies “Bend it Like Beckham” and “Bride & Prejudice,” is set to release a new film this Winter called “Christmas Karma,” based on Charles Dickens’ classic, “A Christmas Carol.” The director told CNBC it’s a “miracle” that she’s been able to make the film, given the challenges faced by the industry.
“I’m not sure that tariffs are practical, but I think we have to look at the message behind that, which is that every country is trying to protect its own film industry,” she said.
Audience members wear 3D spectacles to watch a movie.
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Still, the British film and TV sector is a bright spot for the economy, contributing billions of pounds through production spending, which reached £5.6 billion ($7.5 billion) last year, according to the British Film Institute (BFI).
“We know that it’s worth — about 126 billion pounds a year — our creative industries. Quite often, people think about film and television as being things that make you feel good, things that entertain you, but actually they create thousands and thousands of jobs and huge amounts of inward investment across the U.K.,” said Caroline Dinenage, a member of parliament and chair of the U.K.’s Culture Media and Sports Committee.
U.S. dependency
From Pinewood to Shepperton, U.K. studios depend heavily on U.S. partnerships. Last year, 65% of total U.K. production spend on film came from U.S. studios and streaming platforms, per a BFI report.
Without this stateside contribution, it would be more difficult to make British movies, according to film director Howard Berry.
“We are quite reliant on the U.S. investing into the U.K. to make films. We have to wait for them to say we’re going to make a film, and then we scramble around to make it happen,” he said.
“We’re not so great at having a pot of money for the U.K. to say we’re going to make U.K. films. And so if that money doesn’t happen anymore, we’re kind of stuck. We don’t have that huge amount of investment to make our own films.”
Modern filmmaking is a collaborative process, with scripting, filming, post-production, and music development often worked on across different countries. This makes it difficult to enforce tariffs, according to the Vue CEO Tim Richards.
“I think because of the complexities, because there are other ways of actually implementing and getting to the same place, through tax credits, even what Gavin Newsom has been proposing as well in California, that there are other means of achieving the same goals without having the impact on the industry,” Richards said, referring to California Governor Gavin Newsom.
This summer, Newsom increased the total film and TV tax credit to $750 million in California, nearly doubling the previous cap, in a bid to encourage more productions to film in Los Angeles.
“How do you define what is going to be actually hit by these tariffs? That’s what everyone’s really been focusing on,” he added.
Zygi Kamasa, CEO of British-based theatrical distributor True Brit Entertainment, said that U.S. movie tariffs could result in the U.K. collaborating more with other nations.
“A lot of our films that we made over the years, that we made in Britain, travel very well to Europe and Asia. And I think we’d look at co-production opportunities more out of the European territories to bolster the financing opportunities.”
For now the cameras keep rolling – but many within the industry are hoping the U.K. government will take action.
When Trump first called for 100% tariffs on movies, a spokesperson from the U.K. government told local media that it was not in the national interest to provide a “running commentary” on trade matters with the U.S. They added that the British film industry is “world-class.”
“It’s a really important thing for our prime minister to be discussing with the U.S. government, and I think it should definitely be front and center of any future trade discussion,” said Dinenage.