By S.L. Kanthan
With the advent of the internet and social media, the power of traditional movies may have relatively declined, but Hollywood is still crucial for the US global soft power. However, the White House’s proposal to impose tariffs on movies produced abroad is not only misguided but will produce the exact opposite of the intended outcome – hurt the US film industry and its soft power. The American fear of free trade reflects its dwindling self-confidence in a multipolar world.
First, the claim that the American movie industry is “dying” is an exaggeration. Hollywood’s box office revenue is expected to surpass pre-2019 levels by 2026. According to Bloomberg, while more movies and TV shows are being produced abroad, the US entertainment industry still exports three times as much as it imports.
Moreover, international markets account for over 70 percent of Hollywood’s box office revenue. Thus, globalization benefits the American movie industry.
Also, many American films are at least partially filmed outside the US for many reasons – suitable locations, talents from other countries, and lower cost of production. In 2023, about half of the spending by US producers on movie and TV projects with budgets of more than $40 million went outside the US, according to research firm ProdPro. This is why much of the reaction from Hollywood has been negative toward the tariff proposal.
Beyond movies, the American entertainment industry generates billions of dollars globally through streaming services such as Netflix and even merchandise. Therefore, the mercantilist idea of forcing movies to be made 100 percent in the US is impractical and dangerous, as it will wreak havoc on the very industry that Trump is trying to save.
Just like an iPhone is made of components from dozens of countries, a movie might be created from collaboration around the world. Take Gladiator II, a movie that earned about half a billion dollars at the box office. It was distributed by Paramount, an American company, directed by an English filmmaker, filmed mostly in the UK, and features actors from the US, Australia and UK, among others. How does one determine tariffs on such a movie? It’s unimaginable.
Additionally, films fall under intellectual property that is currently not subject to tariffs. However, there are other options, such as tax incentives and regulations, that can create barriers for foreign movies or American movies filmed outside the country.
What the US fails to recognize is that international flavor is a key reason for the global success of Hollywood movies. For example, James Bond movies have universal appeal, because they have been filmed around the world. Any protectionist move by the US will also likely trigger retaliatory moves by other countries, thus resulting in substantial losses for Hollywood.
The current US administration also mentions “propaganda” as one of the reasons why it wants movies to be made in America. This is ironic, considering the Pentagon and CIA’s collaboration with Hollywood. In fact, it has been already exposed by insiders within the US film industry that the US military and deep state have closely worked with more than a thousand movies and TV shows. In these situations, US government liaisons help write the scripts and censor ideas that do not portray the US in a positive light.
If every country is afraid of “propaganda” from abroad, nobody would watch American movies.
The angst about foreign movies is merely a reflection of the holistic decline of the US Empire in a decentralized world. Studios and artists around the globe now have the finance, technology and talent to create excellent movies that can compete with Hollywood. South Korea, for example, has been recently producing several K-dramas that have enjoyed global success. And China’s Ne Zha 2 becomes the world’s highest-grossing animated movie.
A few decades ago, Italian and French movies were considered as good as or better than American movies. The dominance of Hollywood is a temporary phenomenon, just like the US primacy in the economy, technology, and military.
In the bigger picture, here are some key principles to keep in mind. First, globalization is an inexorable force. Protectionism is futile. Second, competition is good for Hollywood, which has lost its creative edge since its golden age a few decades ago. Meanwhile, filmmakers around the world are now producing wholesome, thoughtful, and inspiring movies. Third, blaming others might be a populist strategy that pleases the voters, but it will not help make manufacturing or movies great again.
The author is a geopolitical analyst, columnist, blogger, podcaster, and writer based out of Bangalore, India. His work can be found on Substack, X and more. opinion@globaltimes.com.cn
