Donald Trump just laid out his plan for a 100 percent tariff on all movies made overseas. This courageous act has sparked widespread alarm among international filmmakers, particularly to the filmmaker community in Hungary. The U.S. film industry, which has seen a significant amount of its production relocate abroad, faces challenges that Trump believes need addressing. We look forward to working with him on ways to protect American jobs while recognizing that over 20,000 of them are in our growing domestic film sector.
For the Hungarian film industry, their economic success story has largely resulted from the burgeoning U.S. investments and productions. About 85 to 90 percent of financing for Hungarian movies comes from American money. Trump’s proposed tariffs threaten to break this relationship, putting local filmmakers and studios’ future in limbo.
Impact on the Hungarian Film Sector
Since 2010, Viktor Orbán’s darkly nationalist government has radically reshaped the world of film support in Hungary. The magic-maker behind these exciting reforms has been legendary Hollywood producer Andy Vajna. Vajna’s efforts were able to usher in a statewide corporate tax credit worth 25 percent of production expenses. This credit had been raised to 30 percent for eligible projects. These incentives combined have made Hungary an enticing location for international filmmakers.
Csaba Káel, head of the Hungarian National Film Institute, brings us good news. The production service revenues in Hungary’s film industry have increased fourfold from 2018 to 2023! Káel expects them to come within spitting distance of $1 billion in revenues in the near future. Such dramatic increases reflect a booming film industry, one that is deeply dependent on U.S. partnerships.
The imposition of tariffs would jeopardize this momentum. Mihály Tóth, marketing director of Origo Filmstúdió, said he doubted the proposed tariffs would be feasible to implement. He noted that “the decision to shoot American films in Hungary was not made by us, but by American filmmakers, on the simple basis of where a film can be produced most efficiently.”
“Nobody understands the kind of customs clearance system that is now being suggested because you can’t tax a cultural product in this way.” – Mihály Tóth
Concerns from Filmmakers
Many filmmakers in Hungary expressed serious concerns regarding the manner in which such tariffs would be enacted and their effects on the burgeoning film industry. As Tóth highlighted, building complex sets or shooting locations only for a film would be economically impractical.
“For example, filming a Harry Potter movie requires a medieval castle. It costs more money to build that than to go to a castle and shoot a scene there,” Tóth explained. “To suddenly have medieval castles in a country where there are none, you can’t expect that, because economically it doesn’t go anywhere.”
The filmmaking landscape in Hungary is not only historically rich, but booming with international and domestic productions. Uncertainty around tariffs introduces a whole new layer of unpredictability.
“Today’s rain will affect the filming outside more than this announcement,” Tóth quipped, highlighting how unpredictable factors can play a larger role than political decisions.
Future Outlook
The tariffs discussed wouldn’t be limited to Hungary as they could hit close allies of the United States such as Canada, the United Kingdom, and Australia. Károly Radnai, managing partner of Andersen Adótanácsadó Zrt, has suggested that these nations may be more directly impacted by Trump’s policies.
Producers like Gergő Balika from Mid Atlantic Films believe that U.S. government pressure may soon compel studios to shift more production back home to comply with new regulations. This situation creates a huge Catch-22 for Hungarian filmmakers who have grown used to the advantages of U.S.-sourced funding.
“The intention to make more films in the United States and export fewer films overseas is not something that has just been invented but has been heard louder and louder for 4-5 years,” Tóth remarked.
In response, Káel called on the Hungarian government to act. He calls on them to leverage their close ties to the Trump administration to protect the future of the film industry.
“It would be important for the Hungarian government to act as soon as possible and use the good relations with the Trump administration to assert our country’s interests diplomatically.” – Károly Radnai
President Trump did approve of the challenges currently facing the U.S. film industry in his announcement. He said the industry was “perishing at a cannibalistic speed” because of foreign competition. Given that, he underlined that, going forward, he means to prioritize domestic production efforts.
“Therefore, I am authorizing the Department of Commerce to immediately begin the process of imposing a 100 percent tariff on all foreign-made films coming into our country,” Trump declared.
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