U.S. President Donald Trump announced a new sweeping trade policy on Sunday evening that threatens to shake up the global film industry and potentially devastate Toronto's thriving movie and TV production sector.
Last night, Trump declared a 100 per cent tariff on all movies produced outside the United States, and framed the move as a matter of economic urgency and national security.
"The Movie Industry in America is DYING a very fast death," he posted on Truth Social. "Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States… It is, in addition to everything else, messaging and propaganda!"
He went on to authorize the Department of Commerce and the U.S. Trade Representative to begin implementing a 100 per cent tariff on any movie produced in countries outside of the U.S. "WE WANT MOVIES MADE IN AMERICA, AGAIN," he wrote, to which Commerce Secretary Howard Lutnick confirmed, "We're on it."
The announcement left industry insiders scrambling, as Hollywood executives are reportedly trying to determine how the new policy would be enacted and how it would impact U.S.-based studios and companies that film abroad. The implications for Toronto, which is often referred to as "Hollywood North," could be dire.
Thanks to generous tax incentives, Toronto has become a global hub for film and TV production, with box office hits like Suicide Squad, Pacific Rim, X-Men, and The Shape of Water all having scenes filmed in the city.
Toronto's screen production industry set a record with more than $2.5 billion in direct spending in 2021, followed by $2.6 billion in 2022. According to MovieMaker Magazine's 2024 survey, Toronto was ranked the number one "Best Place to Live and Work as a Movie Maker."
Tax incentives in Toronto include stackable, as well as domestic and treaty co-production tax credits. Various tax credits can also be combined to offer savings up to 45 per cent on qualified labour costs and up to 35.2 per cent on total production costs. There is no individual cap on the eligible credit per production or on the number of productions that can access the credits.
More broadly, Ontario is among the world's leading jurisdictions for film and television production, consistently hosting more than 400 productions annually. The region currently boasts 3.85 million square feet of stage space, with another 1.6 million square feet in development.
Such incentives have continuously lured American studios north of the border, but Trump's tariffs could disrupt this trend. Despite Hollywood's reputation, much of its content isn't actually filmed in California anymore, as production studios increasingly rely on the economic advantages offered by cities like Toronto and Dublin.
"Hollywood, and many other areas within the U.S.A., are being devastated," Trump wrote. The U.S. box office gross peaked at nearly $12 billion in 2018 but plunged to just over $2 billion in 2020 amid the global pandemic.
While theatres have reopened, ticket sales remain sluggish, and the number of major releases is about half of what it was prior to COVID-19, with the situation being made even more challenging thanks to the rise of streaming services like Netflix.
Still, the Motion Picture Association reported that the U.S. film sector supported more than 2.3 million jobs and $279 billion in sales in 2022.
On the other hand, the film, television, and digital media industry in Toronto employed more than 35,000 people in 2022.
It remains unclear whether the tariffs would only apply to theatrical releases or also to films distributed through streaming platforms. Trump did not clarify if the tariff would be based on a film's production cost or its box office revenue.
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