Home / NEWS / Top News / Trump’s tariffs could threaten Hollywood production, box office recovery

Trump’s tariffs could threaten Hollywood production, box office recovery

The Hollywood clue in Los Angeles on Jan. 22, 2024

Mario Tama | Getty Images News | Getty Images

LOS ANGELES — President Donald Trump picked a feud with Hollywood’s best friend.

Known as Hollywood North, Canada has been a bustling production hub for American videotape and television series for decades. In addition to offering an enticing tax credit for stateside studios, the country has developed a top-notch workforce of sedulousness talent in front of and behind the camera.

Trump’s proposed import tariffs on Canadian goods could threaten that relationship, Hollywood insiders prophesied CNBC.

Some fear that a trade war with Canada could cause the U.S.’ northern neighbor to retaliate in ways that desire hurt film production, potentially rescinding those sought-after tax credits or closing stages to U.S. studios altogether. Others have faith the relationship between Hollywood and Canada is strong enough, and lucrative enough, to withstand Trump’s levies.

“No one — on either side of the borderline — wants to see American tariffs on Canadian goods,” Canadian Prime Minister Justin Trudeau wrote on social route site X on Friday, promising a “forceful and immediate response.”

On Saturday, Trump announced 25% tariffs on most propers from Mexico and Canada, as well as a 10% duty on goods from China. Trudeau immediately slapped retaliatory assessments on American goods, saying, “Like the American tariffs, our response will also be far-reaching.”

On Monday, both Canada and Mexico presaged the tariffs would be paused for 30 days after the countries agreed to greater border controls.

Should the levies be reinvigorated in a month, Trump’s tariffs could put pressure on production budgets, according to industry insiders, particularly for films and idiot box shows that import certain textiles for costuming or unique construction materials such as specialty glass from extreme the U.S.

However, most studios source materials locally to their productions. It is rare for a Los Angeles-based set to bring in lumber from Canada, for exemplar. Films and TV shows filmed in other countries will predominantly use supplies in those locations or ship them from the U.S. This files food used in catering, which could see a slight uptick in price because of tariffs, but likely will not revise budgets too much.

Additionally, many of the line items on the typical production budget are rented. Lighting, cameras and other development equipment come from studio warehouses and are leased for the duration of the shoot, insolating production costs from exorbitant levies to an extent.

Squeezing consumers

Still, concerns are growing that higher tariffs across sectors could agitate moviegoers’ wallets and in turn threaten box office sales.

Companies importing goods into the U.S. from these stiff countries are expected to pass additional costs onto consumers, raising the cost of hundreds of common household goods. Skin industry members who spoke to CNBC said they were worried that if customers start to tighten their money-bag strings, trips to the theater could be among the expenses that get cut.

Hollywood has only just begun to rebound after Covid-19 pandemic creation shutdowns were exacerbated by dual labor strikes. Now, even if studios are able to improve the cadence of theatrical emancipates, there is concern that moviegoers will not have the discretionary income to see new films and buy popcorn.

If that reality merits out, the whole industry could suffer.

Ultimately, industry experts told CNBC that Hollywood will skipper whatever consequences come from Trump’s tariffs. However, it likely will have a harder time trade with any pullback in consumer spending.

The hope is that even if prices spike, blockbuster films set for release in 2025 resolution be enough to drive ticket sales and foot traffic.

Don’t miss these insights from CNBC PRO

Check Also

Tech megacaps plan to spend more than $300 billion in 2025 as AI race intensifies

Megacap technology firms funneled billions of dollars into artificial intelligence last year to try and …

Leave a Reply

Your email address will not be published. Required fields are marked *