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European moviemakers were left scratching their heads when Donald Trump, in a vague social media post on Monday, floated the idea of slapping tariffs on foreign-made films.
The industry relies on US distributors not only to reach American audiences but also viewers at home.
Streaming giants like Netflix, Amazon Prime Video and Disney+ sit on much of the European consumer market: almost 40% of video-on-demand services operating in the EU are in US hands.
Netflix has opened 11 local offices and collaborates with more than 400 producers in Europe, according to the company. But European industry players are either not ready or silent on the threat of Hollywood tariffs.
“The declaration is by far too vague to understand what it is really about and therefore comment on it,” said Gilles Fontaine, an academic following market development with the European Audiovisual Observatory.
The European Producers Club and the Brussels-based International Federation of Film Producers both declined to comment. So did the Motion Picture Association (MPA), which represents major US players including Netflix, Disney+ and Universal Studios.
A long prelude
Despite the filmmakers’ surprise, the warning signs were there.
In February, the White House released a memo touting non-tariff barriers from US trade partners. The memo called out “foreign legal regimes” for requiring “American streaming services to fund local productions.”
The Motion Picture Association, the trade association representing the five major film studios in the US, had also addressed a report to the US trade representative on 11 March, raising issues with EU law’s mandatory investment and quotas in European content.
The EU’s audiovisual law requires on-demand services to ensure that a certain share of its catalogue comprises European films and series. National governments can also impose quotas beyond EU-wide requirements.
“You can call it protectionist, but it’s about stimulating a local market that couldn’t survive without local money,” Professor in Film and Media Studies at Ghent University Daniel Biltereyst said, dismissing American criticisms of European quotas.
The money earmarked to local productions is peanuts “if you compare it to Hollywood budgets, it’s really ridiculous. But it’s clever money,” Biltereyst added.
The EU legislation is scheduled to be reviewed in December 2026. US pressure could push the EU to reconsider quotas, but the political will has been lacking so far.
In March, a group of 50 MEPs led by Socialist lawmaker Emma Rafowicz sent a letter to the Commission, urging them to defend the audiovisual law.
The letter has so far gone unanswered.
How do you tariff a movie?
While the ongoing transatlantic trade spat has so far been limited to goods, selling movies is a service, and taxing it is not as straightforward as it is for goods.
“The only way it can make sense is that the tariff hits the so-called minimum guarantee that an American distributor would pay for a film coming from a European country,” Susan Wendt, director of international sales & marketing at TrustNordisk. But even then, she added, it’s a marginal cost.
Another possibility is that Trump could be referring to the production of American movies outside the US, like the new Avengers movie being shot at Pinewood Studios in the UK.
California Governor Gavin Newsom has also proposed to work with Trump to launch a federal tax credit scheme for moviemakers to lure the creative industry back to the Golden State.
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