President Trump relaunched his idea for a 100% price on foreign manufacturing films on Monday – and this time, he gave the impression that he was really going to do it.
In May, he said that “authorized” such a price. On Monday, he said that he would “impose”.
Not unusual for Trump, that leaves many practical and legal questions unanswered. Hollywood is preparing to release a series of major films that have been produced abroad – “Tron: Ares”, shot in Vancouver; “Wicked: for good,” shot in London and Cairo; And “Avatar: Fire and Ash”, partly shot in New Zealand.
Will they be a price? Who knows.
Here are some obstacles in the way of transforming a social post of truth into a real policy:
Understand what to tax
Most countries that regulate in this area do so with quota systems – either limiting the number of foreign films authorized in the country, that is requiring that theaters project a minimum number of interior films.
The imposition of a price would require determining a transaction to tax. American studios that produce films abroad do not “import” them in the United States via entrance ports for a fixed price. The films are produced and published through the territorial borders. Therefore, imposing a price would require loss of a kind of price abroad from the film.
The “Jon Voight Plan” version project which circulated earlier this year provided for a 120% rate on the amount of subsidies received to shoot abroad. Thus, if a production received $ 50 million from provincial and federal subsidies in Canada, this production would be affected by a price of $ 60 million. At this level of taxation, politics would obviously resemble an embargo at a tax, because it would effectively close this form of economic activity.
A simpler option would be to impose a ticket tax on films produced abroad, or a tax on national box office revenue for films produced abroad. But that’s not what Trump proposed.
Find legal authority
Trump imposed many of his prices for the second mandate under the international law on the economic powers of 1977. But this law includes a specific projection which makes it incapable of foreign manufacturing films.
In August 2020, Trump invoked the ieepa to effectively ban Tiktok in the United States, but a district judge quickly granted an injunction preventing the order from taking effect, noting that he took his interview with the exception of “information documents”. This exception – called Berman’s amendments – explicitly prevents the government from using the IEEPA to regulate the importation of films, music, works of art, newspapers and other contents of this type. Presumably, a similar injunction would be published if the ieepa was used to justify a film rate.
Trump could also try to invoke article 301, which gives powers to combat unfair commercial practices, or article 232, which applies to national security situations. This would probably also lead to legal challenges for reasons of the first amendment or other bases.
Lack of political support
It is not an exaggeration to say that no one in Hollywood wants. Hollywood unions are very concerned about the fact that the production of films has fled abroad. But their solution is an American federal subsidy to counter the subsidies offered by the United Kingdom, Canada and other countries. (Some Democratic legislators are working on this idea, so far without having a lot of traction.)
The theater operators, who find it difficult to remain afloat, would categorically oppose the prices on tickets. The public does not claim either to pay more for cinema tickets.
Political feeling can limit government action. Last week, the Federal Communications Commission fell shortly after making threats to the ABC subsidiaries that led Jimmy Kimmel to be removed from the air for a few days. The wave of opposition to this type of open aggression even included republican senators. Thus, while the FCC could still continue complaints against ABC affiliates or take other measures, its bluff has been called.
The same could happen here, long before one of the chaos that could result from the real implementation of politics.
