100% Hollywood Tariff - Hoisted by its Own Petard

The Hollywood Tariff: A Logical Look at Its Impact on Jobs

As a personnel recruiter specializing in professional placements, I rely on logical analysis to understand how policy shifts and technological trends affect industries. While the Entertainment sector isn’t part of my portfolio, President Trump’s recent announcement of a 100% tariff on foreign-made films has sparked my interest. This policy, intended to revive Hollywood, could have unintended consequences, potentially leading to job losses for supporting actors, actresses, and non-AI-skilled crew members while creating new AI-related roles. Let’s explore this logically and consider what it means for the future of work in Hollywood.

Hollywood’s Current Struggles

Hollywood is grappling with significant challenges. The industry has lost over 18,000 jobs domestically in the past three years, and on-location production in Los Angeles has dropped by 22.4% compared to the previous year. Post-pandemic recovery, 2023 labor strikes, and foreign incentives luring productions to countries like Canada and the UK have strained the industry. The tariff is intended to reverse "runaway production" by making it cost prohibitive to film overseas, but it may have the unintended effect of shifting everything to AI.

The Rise of AI in Filmmaking

Artificial intelligence (AI) is already reshaping filmmaking, with tools used for script analysis, editing, and visual effects. The tariff could accelerate this trend by incentivizing studios to use AI to avoid overseas filming costs. For instance, instead of shooting in Paris, filmmakers could use AI to generate a virtual Parisian backdrop, cutting costs and bypassing tariffs. Requiring 100% domestic production may not significantly increase local jobs and may instead push studios to rely more heavily on AI. This shift could reduce demand for supporting actors, location scouts, camera operators, and other crew members, particularly in lower-budget productions where cost savings are critical.

Job Displacement vs. New Opportunities

The increased use of AI could lead to significant job displacement. Supporting actors and actresses, who often fill background or minor roles, are particularly vulnerable as AI-generated characters become more viable. Similarly, crew members without AI expertise—such as those involved in location-based production—may face reduced opportunities. However, AI could also create new roles in areas like virtual set design, AI-driven visual effects, and script analysis. These jobs require technical skills, which may pose a challenge for workers transitioning from traditional roles.

To illustrate, consider the following comparison of job impacts:

While new AI-related jobs could offset some losses, the skills gap means many workers may struggle to adapt without access to training.

A COVID-19 Parallel

This scenario echoes the COVID-19 pandemic, when travel restrictions devastated industries like airlines and travel agencies but spurred growth in video conferencing platforms like Zoom and Microsoft Teams. Similarly, the tariff and AI could disrupt traditional filmmaking roles while creating opportunities in AI-driven production. The challenge lies in ensuring workers can transition to these new roles. Just as the pandemic highlighted the need for adaptability, this policy underscores the importance of upskilling to navigate technological change.

Why This Tariff Raises Concerns

From a logical perspective, this tariff appears counterproductive. Hollywood’s filmmaking process has long relied on international collaboration, with movies often shot in multiple countries to take advantage of lower costs, tax incentives, and unique settings. This approach ensures that films remain visually fresh—after all, audiences wouldn’t want to see the same backdrop repeatedly in every movie. Restricting productions to the U.S. could limit creativity, but instead of simply increasing costs, studios may respond by shifting more aspects of filmmaking to AI.

Despite filming abroad, major Hollywood studios remain U.S.-based, meaning they still retain full ownership of their films, collect profits worldwide, and pay taxes domestically. To understand this better, consider how the IT and software industry operates: Companies like Microsoft, IBM, and Oracle employ software developers overseas, yet their products remain under U.S. ownership. Global profits flow back to the U.S., where taxes are paid. Hollywood functions in a similar way—whether a movie is shot in Los Angeles, Canada, or the UK, its revenue and tax contributions still benefit the American economy.

By imposing a 100% tariff on foreign-made films, the policy assumes that keeping production domestic will preserve traditional Hollywood jobs. However, in reality, it may accelerate a shift toward AI-driven filmmaking—where studios use AI-generated backdrops, characters, and effects instead of hiring real crews for on-location shoots. This could lower production costs while simultaneously reducing human employment, particularly among supporting actors, set designers, and technical staff. Rather than reviving Hollywood jobs, the tariff might unintentionally push filmmakers toward AI automation, transforming the industry in a way its creators never intended.

Clearly, none of this seems to have crossed the minds of Trump's trade advisors. Instead of thinking through basic economics, they decided that slapping a 100% tariff on foreign-made films was the magic fix—never mind how the industry actually works. You don’t need a fancy Ivy League degree to see how flawed this is. Honestly, it makes you wonder what kind of international trade expertise was floating around in those advisory meetings—or if they were just winging it.

The Path Forward

The tariff’s impact on Hollywood jobs will depend on how studios adapt and whether workers can upskill. Training programs in AI technologies could help bridge the gap, enabling professionals to move into emerging roles. Industry leaders and policymakers must also clarify the tariff’s scope to reduce uncertainty. Hollywood has a history of resilience, from the shift to talkies to the digital era, but this transition will require careful navigation to balance innovation with job preservation.

As a recruiter, I see parallels in other industries where technological disruption demands adaptability. Hollywood’s workforce must prepare for a future where AI plays a larger role, and stakeholders must work together to ensure this change benefits both the industry and its workers. While the tariff may aim to make Hollywood “Great Again,” it may actually cause unintended harm to the very people it seeks to support.

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