US movie-making tariff threatens success of Australian film industry

The growing Australian film industry has been left reeling after US President Donald Trump announced he would impose a 100 per cent tax on movies “produced in foreign lands”, with NSW Premier Chris Minns calling it a “bad decision”.

Trump’s announcement comes on the heels of Sydney – and NSW more generally – becoming a major hub where international movies like Peter Rabbit 2, the Fall Guy and Anyone But You have been filmed.

“This is a bad decision for films and movies, whether they’re made in Australia or the United States,” Mr Minns told The Daily Telegraph.

“It’s short sighted and won’t work. We’ll be defending our screen industry as well as the local jobs it creates.”

Mr Trump announced on social media that all films made outside the US would be hit with the tariff*, describing the incentives* used by countries like Australia to lure the film business to their shores as “a national security* threat.”

“The movie industry in America is dying a very fast death,” Mr Trump announced.

“Other countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States. Hollywood, and many other areas within the USA, are being devastated.

“This is a concerted effort by other nations and, therefore, a national security threat. It is, in addition to everything else, messaging and propaganda*.”

According to FilmLA, movie production in Los Angeles has fallen by almost 40 per cent over the past decade.

Last year, Australia increased its production incentive from 16.5 to 30 per cent. There are also state incentives available that can add up to 15 per cent.

Mr Trump’s new tariffs will hit the NSW film industry harder than anywhere else in the country, with the state home to 51 per cent of Australia’s screen production business.

This poses a direct threat to the state’s billion dollar sector. The film and television industry contributed $1.115 billion to the NSW economy in 2023-24 and employed nearly 12,900 people.

The latest data from the Australian Bureau of Statistics (ABS) shows the industry was worth around $5 billion to the Australian economy in 2021-22.

As Australia’s film industry scrambles to make sense of the new tariffs, Federal Arts Minister Tony Burke said he had reassured the sector that the government would stand up for them.

“I’ve spoken to the CEO of Screen Australia and we’re monitoring this closely,” he said.

“Nobody should be under any doubt that we will be standing up unequivocally* for the rights of the Australian screen industry.”

Trade Minister Don Farrell called the tariffs “unjustified”.

It remains unclear how the tariffs would be calculated and charged to businesses and consumers.

HOW HAS THE FILM WORLD REACTED?

Screen Producers Australia CEO Matthew Deaner said the industry was trying to make sense of Mr Trump’s announcement while calling on the government to act swiftly to help safeguard the future of the industry.

“There’s no doubt it will send shockwaves worldwide,” he said.

Business NSW chief executive Daniel Hunter agreed, stating the tariff would “hit regional NSW hard”.

“Films like Elvis, Fall Guy, Mad Max Fury Road and Furiosa were all filmed in Australia, creating thousands of jobs and pumping millions into the Australian economy,” he said.

“Tariffs like these could shut the door on future opportunities, stalling growth in both the screen industry and regional communities that rely on it.”

Filmmakers have expressed outrage over the move, saying it made little sense since not all American movies are set in America.

“This makes no sense,” a UK producer told Variety. “It implies that a US film is meant to shoot in the US. But the Harry Potter films, Lord Of The Rings, Schindler’s List, Mission Impossible, Gladiator, Aviator and so many more are US films that shot overseas for obvious reasons. Do these films have to shoot in the US from now on? It’s an absurd announcement with no meaning nor understanding of storytelling or creative impulses.”

It is also unclear whether the tax will affect streaming productions and productions currently being filmed.

The latest instalment in the Godzilla franchise* is currently filming on the Gold Coast and in February, filming began on action thriller Bear Country starring Russell Crowe which was expected to inject more than A$11 million into the local economy. In December, Screen Queensland announced a new Anaconda film, featuring Jack Black and Paul Rudd would be shot in the state in a A$40 million windfall*.

Without the tax incentives offered by countries like Australia, making a film in the US can be 30 to 40 per cent more expensive, which could lead to ticket prices and streaming subscriptions increasing.

US crews and stars are also more expensive than their international counterparts, largely because of US unions*.

The 2023 SAG-AFTRA strike* lasted five months and contributed to the biggest interruption to the American film and television industries since the Covid-19 pandemic.

It created a shortage of new movies and TV shows, as it halted production and delayed releases for many projects.

The strikes were estimated to have cost the film and television industry billions of dollars due to halted production, reduced spending, and staffing cuts, according to Camoin Associates. Studios had to look elsewhere for content, including foreign films.

Trump’s announcement on film taxes comes a fortnight after the US President paused his sweeping reciprocal tariffs* to negotiate individual trade deals with each country.

Australia is currently subject to a 10 per cent tariff on all goods exported to the US and a 25 per cent tariff on steel and aluminium exports.

Last month, China restricted imports of Hollywood movies in retaliation to punishing tariffs imposed by the US.

POLL

GLOSSARY

• tariff: import tax imposed by a country
• incentives: benefits to lure a company into doing business
• national security: the safety of a country against threats like espionage, war or terrorism
• propaganda: biased information used to promote a political cause or point of view
• unequivocally: in a way that leaves no doubt
• franchise: a series of films sharing the same characters or themes, marketed and produced to capitalise on the success of the original film
• windfall: a large amount of money received unexpectedly
• unions: associations formed by people with a common interest or purpose, in this case, actors and screenwriters fighting for better pay and job security
• SAG-AFTRA strike: In 2023, the Screen Actors Guild and the American Federation of Television and Radio Artists staged a massive strike involving 160,000 actors, along with 11,500 writers, to fight for better pay and better protection against AI
• reciprocal tariffs: Mr Trump had announced reciprocal tariffs, a minimum baseline 10 per cent tax against all countries that trade with the US, with many countries to be taxed at a much higher rate, but has since negotiated individual trade deals with each country instead

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QUICK QUIZ

1. What does US President Donald Trump’s new tax apply to?
2. What are two Hollywood movies that were filmed in Australia?
3. By how much has movie production in LA fallen over the past decade?
4. How much is the movie Bear Country likely to inject into Queensland’s local economy?
5. How long did the SAG-AFTRA strike last?

LISTEN TO THIS STORY

CLASSROOM ACTIVITIES
1. Hollywood in Australia
Why has Australia been so successful in luring big name movies and their stars to make and produce movies here?

List the reasons stated in the Kids News article and add any further ones you can think of.

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Time: allow 15 minutes to complete this activity
Curriculum Links: English, Digital Technologies, Personal and Social, Critical and Creative Thinking

2. Extension
How can the Australian government and filmmaking industries push back and try to reverse Trump’s decision? List any ideas below;

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Time: allow 10 minutes to complete this activity
Curriculum Links: English, Personal and Social, Critical and Creative Thinking

VCOP ACTIVITY
BAB it!
Show you have read and understood the article by writing three sentences using the connectives “because’’, “and”, and “but” (BAB). Your sentences can share different facts or opinions, or the same ones but written about in different ways.