President Donald Trump has taken aim at one of Hollywood’s biggest allies—Canada, a long-standing production hub often referred to as “Hollywood North.”
For decades, Canada has been a key player in American film and television production, offering not only generous tax credits to U.S. studios but also a highly skilled workforce, both in front of and behind the camera. However, Hollywood insiders told CNBC that Trump’s proposed import tariffs on Canadian goods could put that relationship at risk.
Some fear that a trade conflict with Canada might prompt retaliatory measures that could impact the entertainment industry, such as eliminating those sought-after tax incentives or even restricting access to filming locations for U.S. studios.
Others, however, believe the deep-rooted and financially beneficial relationship between Hollywood and Canada is strong enough to endure Trump’s tariffs.
“No one — on either side of the border — wants to see American tariffs on Canadian goods,” Canadian Prime Minister Justin Trudeau wrote on social media platform X on Friday, vowing a “forceful and immediate response.”
Potential Impact on Film Production
On Saturday, Trump announced a 25% tariff on most goods imported from Mexico and Canada, along with a 10% duty on Chinese goods. In response, Trudeau immediately imposed retaliatory tariffs on American products, stating, “Like the American tariffs, our response will also be far-reaching.”
However, on Monday, both Canada and Mexico agreed to pause the tariffs for 30 days while negotiations on border controls continue.
If the tariffs are reinstated next month, industry experts warn that production budgets could be affected, particularly for films and television projects that rely on imported materials such as specialty textiles for costumes or unique construction materials like high-grade glass.
Trump Tariffs On Canada (Photo: Carlos Barria)
That said, most Hollywood productions tend to source materials locally. A Los Angeles-based set, for example, rarely imports lumber from Canada.
Productions that take place overseas generally use locally available materials or ship supplies from the U.S. While catering costs could see a slight increase due to tariffs, experts believe it is unlikely to cause significant budget disruptions.
Additionally, many essential production costs—such as lighting, cameras, and other equipment—are typically rented from studio warehouses, shielding productions from the direct financial impact of higher import duties.
Concerns Over Consumer Spending
Beyond production budgets, there is growing concern that higher tariffs across multiple industries could strain consumer wallets, which in turn could threaten box office sales.
Businesses importing goods from Canada, Mexico, and China are expected to pass the increased costs onto consumers, potentially raising prices on hundreds of everyday products. Some in the film industry worry that as people adjust their spending habits, discretionary expenses—like trips to the movie theater—might be among the first to be cut.
Hollywood is still recovering from the disruptions caused by the Covid-19 pandemic, which were further compounded by last year’s dual labor strikes. Now, even as studios work to rebuild a steady flow of theatrical releases, there is concern that audiences may not have the disposable income to return in large numbers.
If that scenario plays out, the entire industry could feel the impact.
Hollywood’s Outlook Amid Tariff Uncertainty
Despite these challenges, industry experts told that Hollywood will find ways to adapt to the effects of Trump’s tariffs. However, a decline in consumer spending could pose a much greater problem for the industry than production cost increases.
Ultimately, the hope is that even if prices rise, major blockbuster films slated for release in 2025 will be compelling enough to keep audiences coming back to theaters.
